Skip to main content

Full text of "The Ontario Law Reports : Cases Determined in the Court of Appeal and in the High Court of Justice for Ontario, 1913"

See other formats


Digitized by the Internet Archive 
in 2016 





https://archive.org/details/v26ontariolawreports1913 



THE 



Ontario Law Reports. 



CASES DETERMINED IN THE COURT OF APPEAL 
AND IN THE HIGH COURT OF JUSTICE 
FOR ONTARIO. 

1912 . 



REPORTED UNDER THE AUTHORITY OF THE 

LAW SOCIETY OF UPPER CANADA 



VOL. XXVI. 



EDITOR : 

EDWARD B. BROWN, K.C. 



TORONTO : 

CANADA LAW BOOK COMPANY, Limited, 
Law Book Publishers 
32-34 Toronto St. 



1912 



Copyright, Canada, 1912, by the Law Society of Upper Canada. 




JUDGES 



OF THE 

COURT OF APPEAL 

DURING THE PERIOD OF THESE REPORTS. • 



The Hon. Sir Charles Moss, C.J.O. 

“ “ James Thompson G arrow, J.A. 

“ “ John James Maclaren, J.A. 

“ “ Richard Martin Meredith, J.A. 

“ “ James Magee, J.A. 



JUDGES 



OF THE 

HIGH COURT OF JUSTICE 

DURING THE PERIOD OF THESE REPORTS. 



King’s Bench Division. 

The Hon. Sir Glenholme Falconbridge, C.J.K.B. 
“ “ Byron Moffatt Britton, J. 

“ “ William Renwick Riddell, J. 



Chancery Division. 

The Hon. Sir John Alexander Boyd, C., K.C.M.G. 
“ “ Francis Robert Latchford, J. 

“ “ William Edward Middleton, J. 



Common Pleas Division. 

The Hon. Sir William Ralph Meredith, C.J.C.P. 
“ “ James Yernall Teetzel, J. 

“ “ Hugh Thomas Kelly, J. 

Exchequer Division. 



The Hon. 

u a 
u u 



Sir William Mulock, C.J.Ex.D., K.C.M.G. 
Roger Conger Clute; J. 

Robert Franklin Sutherland, J. 



Unattached. 

The Hon. Haughton Lennox, J. 



MEMORANDA 



The Honourable Sir Charles Moss, Chief Justice of Ontario, 
died at Toronto on the 11th October, 1912. 



In Hilary Term, 1912, the following gentlemen were called to 
the Bar: — 

James Miles Langstaff (with honours, gold medal, and 
Chancellor Yan Koughnet Scholarship). 

Archibald Cochrane. 

Bernard Collins. 

William George Jackson (with honours). 

Montalieu Nesbitt. 

LeRoy Eaton Awrey. 

Welbern Graham Atkin. 

John Boyd Hopkins. 

Philip Grattan Kiely. 

Daniel Western O’Sullivan. 

Thomas Hamilton Simpson. 

Charles Watson Widdifield. 

Yernon Joseph C allen. 

William Cedric Davidson. 

George Reece Kappele. 

George Keogh. 

Hedley Clark Macklem. 

George Francis Rooney. 

Stanley Howard Slater. 

Hyacinthe Reinhold Yalin. 

Francis James Foley. 

William Yincent Carey. 

Norman Baillie Worm with. 

John Charles McKay MacBeth. 



VIII 



MEMORANDA. 



James Henry Oldham. 

Herbert Bethune Daw. 

Alexander Murray Garden. 
Arthur Burgess Turner. 

John Hylton Cavell. 

John Cowan Jr. 

Hugh Percival Adams Edge. 
Maurice James Folinsbee. 

Howard Kilbourne Harris. 

Hugh Leonard O’Rourke. 

Edgar Fraser Raney. 

Ephraim Frederick Singer. 

John Richard Oorkery. 

Harry VanWyck Laughton. 
Clarence Lorne Fraser. 

George Gilbert Thrasher. 

William Joseph Goodwin. 

■Edgar Rodolphe Eugene Cpievrier. 
Samuel Max Mehr. 

Henri Gustave Smith. 



ERRATA 



Page 163, 2nd line of head-note, for “general” read “funeral.” 

“ 419, 11th line from the bottom, the last word on the line should be 

“senior” — not “junior.” 



CASES REPORTED. 



A. 



Adams v. Gourlay 
Allen, Scott v. . . . 


...(D.C.) 


Anglo-Canadian 


Mortgage 


Corporation, Powell-Rees 


Limited v 


. . . (Chrs.) 


Auger, Re 


...(D.C.) 


B. 




Bailey, Beatty v. . 


...(D.C.) 



Bank of Montreal, Freeman 
v 

Beatty v. Bailey (D.C.) 

Bethune v. The King 

Blyth, Village of, and Town- 
ship of McKillop, Re. . . . 

(C.A.) 

Britnell, Rex v (C.A.) 

Brussels, Village of, and Mc- 
Killop Municipal Tele- 
phone System, Re... (C.A.) 

Buchner, Fidelity Trust Co. 
v 

C. 

Cameron, Rudd v. . ..(D.C.) 

Campbell, Jarrett v. . (Chrs.) 

Canadian Pacific R.W. Co., 
Pattison v (C.A.) 

Canadian Pacific R.W. Co., 
Stone v (C.A.) 

Canadian Railway Accident 
Insurance Co., Wadsworth 
v (D.C.) 

Canadian Shipbuilding Co., 
Re 

Carson, Sibbitt v 

Carter, Young v 

Clark v. Loftus (C.A.) 

Cohen, Rex v (C.A.) 

Constantine au and Jones, Re 
(Chrs.) 

Cox, Underwood v. . . (D.C.) 

Crowe, Maloughney v 



D. 

Denton, Re (D.C.) 294 

Dinnick and McCallum, Re 
(D.C.) 551 

E. 

Employers’ Liability Assur- 
ance Corporation, Wallace 
v (C.A.) 10 

F. 

Fidelity Trust Co. v. Buch- 
ner 367 

Fraser, Re (C.A.) 508 

Fraser, McCormick v.(C.A.) 508 
Fraser v. Robertson. .(C.A.) 508 
Freeman v. Bank of Mont- 
real 451 

Fremont v. Fremont. . (D.C.) 6 

G. 

Galbraith, Rice v (D.C.) 43 

Gourlay* Adams v 87 

Grand Trunk R.W. Co., 

Robinson v 437 

Grand Valley R.W. Co., 
Wood v 441 

H. 

Hamlink, Re Rex v. . . (D.C.) 381 

Honan, Rex v (C.A.) 484 

Huegli v. Pauli 94 

Hunter v. Richards . . (D.C.) 458 

Hutchinson, Re (Chrs.) 113 

Hutchinson, Re (D.C.) 601 

I. 

Imperial Paper Mills of 
Canada Limited v. Quebec 
Bank (C.A.) 637 



87 

571 

490 

404 

145 

451 

145 

117 

29 

136 

29' 

367 

154 

83 

410 

121 

55 

564 

585 

576 

204 

497 

160 

303 

579 



Xll 



CASES REPORTED. 



[VOL. 



J. 

Jardine, Perryman v. . (D.C.) 323 
Jardine, Pukulski v..(D.C.) 323 
Jarrett v. Campbell . . (Chrs.) 83 
Jones, Re Constantineau and 
(Chrs.) 160 

K. 

Kennedy v. Kennedy 105 

Kerley v. London and Lake 
Erie Transportation Co. . . 588 
Kuula v. Moose Mountain 
Limited (Chrs.) 332 

L. 

Livingston v. Livingston . . . 246 

Loftus, Clark v (C.A.) 204 

London and Lake Erie 
Transportation Co., Ker- 
ley v 588 

London Guarantee and Acci- 
dent Co., Youlden v 75 

M. 

McCallum, Re Dinnick and 

(D.C,) 551 

McCormick v. Fraser. (C.A.) 508! 

McGill Chair Co., Re 254 j 

McKillop Municipal Tele- 
phone System, Re Village 
of Brussels and .... (C.A.) 29 

McKillop, Township of, Re 

Village of Blyth and 

(C.A.) 29 

MacMahon v. Railway Pas- 
sengers Assurance Co. . . . 

(Chrs.) 430 

McMulkin v. Traders Bank 

of Canada (D.C.) 1 

Maloughney v. Crowe 579 

Matthew Guy Carriage and 

Automobile Co., Re 377 

Maybury v. O’Brien. (C.A.) 628 
Malancthon Board of 

Health, Rich v (D.C.) 48 

Mercer, Re 427 



Merchants Bank of Canada 

v. Thompson (C.A.) 183 

Moose Mountain Limited, 

Kuula v (Chrs.) 332 

Morton, Rex ex rel., v. 

Roberts (Chrs.) 263 

Morton, Rex ex rel., v. 

Rymal (Chrs.) 263 

Mountain, Re (C.A.) 163 

Munro’s Case 254 

N. 

National Trust Co. v. Trusts 

and Guarantee Co 279 

Northern Crown Bank, 
Townsend v 291 

O. 

O’Brien, Maybury v. . (C.A.) 628 

P. 

Pattison v. Canadian Pacific 

R.W. Co (C.A.) 410 

Pauli, Iiuegli v 94 

Perryman v. Jardine. .(D.C.) 323 
Playfair, Thomson v. . (C.A.) 624 
Powell-Rees Limited v. 
Anglo-American Mortgage 

Corporation (Chrs.) 490 

Pukulski v. Jardine. .(D.C.) 323 

Q. 

Quebec Bank, Imperial 
Paper Mills of Canada 
Limited v (C.A.) 637 

R. 

Railway Passengers Assur- 
ance Co., MacMahon v. 



(Chrs.) 430 

Rex, Bethune v 117 

Rex v. Britnell (C.A.) 136 

Rex v. Cohen..* (C.A.) 497 

Rex v. Hamlink, Re. . (D.C.) 381 

Rex v. Honan (C.A.) 484 

Rex v. Sovereen (C.A.) 16 



XXVI.] CASES REPORTED. Xlii 



Rex ex rel. Morton v. Ro- 
berts (Chrs.) 263 

Rex ex rel. Morton v. Ry- 

mal (Chrs.) 263 

Rice v. Galbraith. . . . (D.C.) 43 

Rich v. Melancthon Board 

of Health (D.C.) 48 

Richards, Hunter v. . (D.C.) 458 
Roberts, Rex ex rel. Morton 

v (Chrs.) 263 

Robertson, Fraser v. . (C.A.) 508 
Robinson v. Grand Trunk R. 

W. Co 437 

Rudd v. Cameron (D.C.) 154 

Rymal, Rex ex rel. Morton 
v (Chrs.) 263 

S. 

Sanderson and Saville, Re . . 

(D.C.) 616 

Scott v. Allen (D.C.) 571 

Sibbitt v. Carson 585 

Sovereen, Rex v (C.A.) 16 

Sproat, Zimmerman v 448 

Stone v. Canadian Pacific R. 

W. Co (C.A.) 121 

T. 

Thompson, Merchants Bank 

of Canada v (C.A.) 183 

Thomson v. Playfair . (C.A.) 624 
Toronto, City of, and Tor- 
onto R.W. Co., Re. (C.A.) 225 



Townsend v. Northern 

Crown Bank 291 

Traders Bank of Canada, 

McMulkin v (D.C.) 1 

Trusts and Guarantee Co., 
National Trust Co. v. . . . 279 

U. 

Underwood v. Cox. . . (D.C.) 303 

W. 

Wadsworth v. Canadian 
Railway Accident Insur- 
ance Co (D.C.) 55 

Wallace v. Employers’ Lia- 
bility Assurance Corpora- 
tion (C.A.) 10 

Wentworth, County of, v. 
Township of West Flam- 

borough (C.A.) 199 

West Lome Scrutiny, Re . . . 

(C.A.) 339 

Wood v. Grand Valley R.W. 

Co 441 

Y. 

Youlden v. London Guar- 
antee and Accident Co. . . 75 

Young v. Carter 576 

Z. 



Zimmerman v. Sproat 



448 



CASES CITED 



A, 

Name of Case. 

Aas v. Benham 

Accident Insurance Co. v. Crandal. . . 

Adams v. McBeath 

Adamson v. Armitage 

yEtna Life Insurance Co. v. Vandecar. ; 
Agricultural Savings and Loan Co. v. 
Liverpool and London and Globe 

Insurance Co 

Aikins v. Blain 

Alderson v. Maddison 

Aldin v. Latimer Clark Muirhead & 

Co, 

Allan v. Clarkson 

Allcord v. Skinner 

Allen v. Wentzell 

Allison v. McDonald 

Almada and Tirito Co., In re 

Amos v. Chadwick 

Amys v. Barton 

Anable v. Fidelity and Casualty Co. 

of N.Y 

Ancient Order of United Workmen of 

Quebec v. Turner 

Andrews ; Re 

Andrews v. Calori 

Angus v. Dalton 

Anon 

Argles, Re 

Arkwright, Ex p 

Askew v. Manning 

Astley v. Earl of Essex 

Atcheson v. Grand Trunk R.W. Co. . . 
Athenaeum Life Assurance Society v. 

Pooley 

Atkinson v. Casserley 

Atkyns v. Pearce 

Attorney-General v. Acton Local 

Board 

Attorney-General v. Bishop of Chester 

Attorney-General v. Gaskill 

Attorney-General v. Hamilton Street 

R.W. Co 

Attorney-General v. Harrison 

Attorney-General v. North Metropol- 
itan Tramways Co 

Attorney-General v. Read 

Attorney-General for Ontario v. Ham- 
ilton Street R.W. Co 

Attorney-General for Ontario v. 

Woodruff 

Atwood v. Atwood. . 

Atwood v. Crowdie 

Avril v. Mordant 

Ayers v. South Australian Banking 
Co 



Where Reported. Page. 

[1891] 2 Ch. 244, 255 246, 249 

120U.S. 527 70 

27 S.C.R. 13 206 

19 Yes. 416 177 

86 Fed. Repr. 282 10 

3 0.L.R. 127 80 

13 Gr. 646 450 

7 Q.B.D. 174 625 

[1894] 2 Ch. 437 478 

17 Gr. 570 653 

36 Ch.D. 145 309 

7 E.L.R. 575 207 

20 A.R. 695 147 

38 Ch.D. 415 258 

4 Ch.D. 869 337 

[1911] W.N. 205 79 

63Atl.Repr.92, 74N.J.L.686. .10, 13 

44 S.C.R. 145 374 

2 A.R. 24 569 

38 S.C.R. 588 630 

3 Q.B.D. 85, 4 Q.B.D. 162. . .470, 471 

6 Gr. 632 371 

10O.W.R. 801 602 

3 Mont. D.& DeG. 129 450 

38U.C.R. 345 271 

L.R. 18 Eq. 290 93 

1 O.L.R. 168. . 125 

3 De G. & J. 294 650 

22 O.L.R. 527 252 

26 L.J.C.P. 252 572 

22 Ch.D. 221 474 

1 Bro. C.C. 444 176 

20 Ch.D. 519, 528 432 

24 A.R. 170 590 

12 Gr. 466 472 

[1892] 3 Ch. 70 494 

2 Mod. 299 275 

[1903] A.C. 524 590 

15 O.L.R. 416, [1908] A.C. 508. . . 4 

15 P.R. 425, 16 P.R. 50 6, 7, 9 

1 Stark. 483 183, 184, 194, 197 

3 L.J.N.S.K.B. 148 325 

L.R. 3 P.C. 548 649 



XY1 



CASES CITED. 



[VOL. 



B. 



Name of Case. 



Where Reported. 



Page. 



Bacon v. Proctor T. & R. 31 181 

Baker v. Baker 6 H.L.C. 616 120 

Baker v. Dawbarn 19 Gr. 113 407 

Ball v. Parker 39 U.C.R. 488 572, 575 

Bank of Toronto v. Perkins 8 S.C.R. 603 650 

Barraclough v. Cooper [1905] 2 Ch. 121 ( n ) 300 

Barrett, Re 5 A. R. 206 569 

Barry v. Barry 1 Molloy 210 372 

Barry v. Barry [1901] P. 87 7 

Barry v. Butlin 2 Moo. P.C. 480 215, 223 

Bassano v. Bradley [1896] 1 Q.B. 645 401 

Baxendale v. McMurray L.R. 2 Ch. 790 461 

Baxter v. London County Council. ... 63 L.T.R. 767, at p. 771 52 

Bealey v. Shaw 6 East 208 461 

Beard v. Westcott 5 Taunt. 393 175 

Beatty v. Beatty 1 O.W.N. 243 7 

Beck’s Case . L.R. 9 Ch. 392 258 

Bedfordshire, Justices of, v. Commis- 
sioners for Improvement of 

Bedford 7 Ex. 658 556 

Behn v. Bumess 3 B. & S. 751 477 

Bell v. Rowe 26 Yict. L.R. 511 151 

Bellerby v. Rowland & Marwood’s 

Steamship Co [1902] 2 Ch. 14 261 

Benor v. Canadian Mail Order Co. ... 10 O.W.R. 1091 377, 381 

Bewick, In re [1911] 1 Ch. 116 175, 179 

Bibby v. Davis 1 O.W.R. 189 48, 50 

Bicknell v. Grand Trunk R.W. Co. ... 26 A.R. 431 437, 439 

Biffin v. Bignell 7 Ex. 877 7 

Birch, In re 15 C.B. 743 399, 401 

Birmingham Dudley and District 

Banking Co. v. Ross 38 Ch.D. 295 471 

Birney v. Toronto Milk Co 5 O.L.R. 1 378 

Bisdee, Ex p., In re Baker 1 Mont. D. & DeG. 333 451 

Bishop v. Bishop [1897] P. 138, at p. 149 7 

Bishop v. Bishop 10 O.W.R. 177 623 

Bishop v. Pentland 7 B. & C. 219, at p. 223 69 

Black v. Delaware and Raritan Canal 

Co 22N.J. Eq. 130, 402 593 

Blackburn v. McCallum 33 S.C.R. 65 175, 177 

Blackburne v. Somers 5 L.R. Ir. 1 461 

Blake v. White 1 Y. & C. (Ex.) 420, 426 185 

Bohan v. Galbraith 13 O.L.R. 301, 15 O.L.R. 37 625 

Bolton Partners v. Lambert 41 Ch.D. 295 625 

Bonar v. Macdonald 3 H.L.C. 226, 238 185 

Bonner v. Bonner 13 Ves. 379 89 

Book v. Book 32 O.R. 206, 1 O.L.R. 86 206 

Booth v. Ammerman 4 Bradford (N.Y. Surr.) 129, at 

p. 133 120 

Booth v. Ratte 21 S.C.R. 637, 643 623 

Bothwell v. Burnside, Re 31 O.R. 695 391, 395, 396 

Boultbee v. Burke 9 O.R. 80 572, 575 

Bowen, In re [1893] 2 Ch. 491 177 

Boyle and Young, Re 1 Mining Commissioner’s Cas. 1. . 618 

Boyse v. Rossborough 6 H.L.C. 2 309 

Bradley v. Elliott 11 O.L.R. 398 624, 629 

Brady v. Chicago and Great Western 

R.W. Co 114 Fed. Repr. 100 426 

Brady v. Sadler 17 A.R. 365 459, 476 

Brandao v. Barnett 12 Cl. & F. 787 184 

Brennan v. Cameron 1 O.W.N. 430 3 

Brice v. Munro 12 A.R. 453 323, 325, 330 



XXVI.] 



CASES CITED. 



XVII 



Name of Case. 

Bridge, In re 

Bristol Cardiff and Swansea Aerated 

Bread Co. v. Maggs 

Britton v. Fisher 

Brocklebank, Ex p 

Bronson and Canada Atlantic R.W. 

Co., Re 

Brow v. Boston and Albany R.R. Co. 

Brown v. Peck 

Brudenell v. Elwes 

Brunswick, Duke of, v. Harmer 

Brunton v. Electrical Engineering 

Corporation 

Buckinghamshire, Earl of, v. Drury. . 

Bullen v. Denning 

Burchell v. Gowrie and Blockhouse 

Collieries Limited 

Burfoot v. DuMoulin 

Burkinshaw v. Nicolls 

Burland v.- Earle 

Burnaby v. Equitable Reversionary 

Interest Society 

Burrows v. Lang 

Burrell, In re, Burrell v. Smith 

Busk v. Royal Exchange Assurance 

Co 

Buxton v. Rust 



Where Reported. Page. 

1 Cr. & Ph. 338, 347 546 

44Ch.D. 616 625 

26 U.C.R. 338, at pp. 339, 340. . . 185 
6 Ch.D. 358, 359 454 

13 P.R. 440 400 

157 Mass. 399 426 

1 Eden 140 93 

1 East 442 175 

14 Q.B. 185 154, 155, 158, 159 

[1892] 1 Ch. 434 650 

2 Eden 60, 71 454 

5 B. & C. 842, 850 648 

[1910] A.C. 614. . . .43, 44, 45, 585, 587 
21 O.R. 583 509 

3 App. Cas. 1004 256 

[1902] A.C. 83 380 

28 Ch.D. 416, 424 454 

[1901] 2 Ch. 502, 510 473 

L.R. 7 Eq. 399 145, 148, 152, 153 

2 B. & Aid. 73 68 

L.R. 7 Ex. 279 630 



C. 



Cadaval v. Collins 4 A. & E. 858. . . . 

Calder and Hebble Navigation Co. v. 

Pilling 14 M. & W. 76. . . 

Callisher v. Bischoffsheim L.R. 5 Q.B. 449. . 

Cameron v. Spiking and Teed 25 Gr. 119 

Campbell v. Dennistoun 23 C.P. 339 

Campbell v. Royal Canadian Bank. . . 19 Gr. 334 

Canada Permanent Loan and Savings 

Co. v. Ball 30 O.R. 557 

Canadian Camera and Optical Co., Re. 2 O.L.R. 677 

Canadian Casualty and Boiler Insur- 
ance Co. v. Boulter 39 S.C.R. 558. . . . 

Canadian Casualty and Boiler Insur- 
ance Co. v. Hawthorne 39 S.C.R. 558. . . . 

Canadian Northern R.W. Co. v. 

Anderson 45 S.C.R. 355 

Canadian Pacific R.W. Co. v. Rosin. . . 2 O.W.N. 610. . . . 
Canadian Railway Accident Insurance 

Co. v. Haines 44 S.C.R. 386 

Carne v. Long 2 DeG. F. & J. 75 

Carpenter v. Canadian Railway Acci- 
dent Insurance Co 18 O.L.R. 388. . . . 

Carr v. Lynch [1900] 1 Ch. 613. . . 

Carslake v. Mapledoram 2 T.R. 473 

Carter v. Boehm 3 Burr. 1905 

Carter v. Foley-O’Brien Co 3 O.W.N. 888 

Cartwright v. Cartwright 12 O.L.R. 272. . . . 

Cave v. Hastings 7 Q.B.D. 125 

Central Bank, Re 21 O.R. 515 

Chadburn v. Moore 61 L.J.Ch. 674. . . . 

Chaddock v. British South Africa Co. [1896] 2 Q.B. 153. . 

Chamberlayne v. Brockett L.R. 8 Ch. 206. . . 

Chaplin v. Hicks [1911] 2 K.B. 786. 



309 

599, 600 

308, 310 

625 

626 

.404, 405, 407, 408 

185 

.279, 289, 565, 570 

57, 69 

57, 69 

125 

628, 629 

70 

105, 108, 109 

75, 80 

626 

401 

511 

334 

207 

626 

653 

629 

495 

173, 175, 176, 181 
447 



B XXVI. O.L.R. 



XVIII 



CASES CITED. 



Name of Case. 

Chapman and City of London, Re ... . 

Cherry v. Mott 

Ching v. Jeffery 

Chisholm v. Chisholm 

Christ’s Hospital v. Grainger 

Christian v. Poulin 

Christopherson v. Naylor 

Clark, In re 

Clark v. Clark 

Clarke v. Sarnia Street R.W. Co 

Clarkson v. McMaster & Co 

Clarkson v. Sterling 

Clayton v. Corby 

Cleaver v. Mutual Reserve Fund Life 

Association 

Clover Clayton & Co. Limited v. 

Hughes 

Cochrane, In re 

Cockburn, Re 

Coles v. Trecothick 

Colledge v. Pike 

Collins v. Kilroy 

Columbia Insurance Co. v. Lawrence. . 
Commerce et 1’ Industrie en France, 
Societe Generale du, v. Johann 

Maria Farina & Co 

Congreve v. Palmer 

Connecticut Mutual Life Insurance Co. 

v. Jacobson 

Conway v. Guelph and Goderich R.W. 

Co 

Cooke v. Stratford 

Cooper v. Hubbuck 

Cork and Bandon R.W. Co. v. Goode. 

Cormier, Ex p 

Cornwall v. Cornwall 

Cornwall Furniture Co., Re 

Cort v. Winder 

Coulson v. Disborough 

Coulthurst v. Carter 

Cox Moore v. Peruvian Corporation 

Limited 

Coyne v. Lee 

Crane, In re 

Creamer v. West End St. R.W. Co. . . 

Crosby v. Ball , 

Croskery, Re 

Crossley & Sons Limited v. Lightowler 

Crow v. Wood 

Cumming, In re 

Cummings and County of Carleton, 
Re 



[VOL. 



Where Reported. Page. 

19 O.R. 33 391 

1 My. & Cr. 123 175 

12 A.R. 432 184, 185 

40 S.C.R 115 116, 602, 607 

16 Sim. 83, 1 Macn. & G. 460. . 174, 176 

1 O.W.R. 275 207 

1 Mer. 320 295, 297, 298 

8 O.L.R. 599 295 

10 P.D. 188 7 

42 U.C.R. 39 650 

25 S.C.R. 96 287 

15 A.R. 234 653 

5Q.B. 415 475 

[1892] 1 Q.B. 147 616, 621 

[1910] A.C. 242 57, 70 

16 O.L.R. 328 207 

27 O.R. 450 459, 471, 481 

9 Ves. 234 626 

56 L.T.R. 124 337 

1 O.L.R. 503 206 

10 Peters (S.C.) 507, at p. 517. . . 69 



[1904] 1 K.B. 794 494 

16Beav. 435 298 

75 Minn. 429 556 

9 O.W.R. 369 334 

13 M. & W. 379, 387 500 

12 C.B.N.S. 456 466 

13C.B. 826 151 

17 Can. Crim. Cas. 179 488 

12 O.W.R. 552 510, 511 

20 O.L.R. 520 254, 259 

1 Coll. 320 295 

[1894] 2 Q.B. 316 509 

15 Beav. 421 298 

[1908] 1 Ch. 604 649 

14 A.R. 503 569 

[1908] 1 Ch. 379 .... 120 

31 N.E. Repr. 391 10, 13 

4 O.L.R. 496 374 

16 O.R. 207 407 

L.R. 2 Ch. 478, 481 473 

13 Beav. 271 649 

1 DeG. M. & G. 537 546 



25 O.R. 607, 26 O.R. 1. 



.390, 399 



D. 



Dalton v. Angus 6 App. Cas. 740 470, 481 

Darley v. The Queen . 12 Cl. & F. 520 271 

David Lloyd & Co., In re. 6 Ch.D. 339 644 

Davis, Re 18 O.L.R. 384 

. . .113, 115, 367, 371, 373, 602, 607 

Davis v. McCaffrey 21 Gr. 554 371, 372 

Dawson v. Isle [1906] 1 Ch. 633, 637 185 

Deacon v. Chadwick 1 O.L.R. 346 3 



xxvi]. 



CASES CITED. 



XIX 



Name of Case. 
Debenham v. Mellon 



Where Reported. Page. 

5 Q.B.D. 394, 6 App. Cas. 24. . . . 



Deere v. Beauvais 

Dennistoun v. Fyfe 

Devine v. Griffin 

Dewar v. Tasker & Sons Limited 

Dickey v. McCaul 

Dinsmore v. Shackleton 

Doan v. Davis 

Doan v. Michigan Central R.W. Co. . 

Dobson v. Dobson. 

Dodge v. Smith 

Donnellan v. O’Neill 

Donovan v. Laing Wharton and Down 
Construction Syndicate Limited.. 

Driffil v. McFall 

Dryden v. Smith 

Duckworth, In re. 

Dudgeon v. Pembroke 

Dumphy v. Kehoe 

Durant v. Canadian Pacific R.W. Co. 
Durant & Co. v. Roberts and Keighley 

Maxsted & Co 

Dutton, In re 

Dyke v. Stephens 



E. 



Eby-Blain Co. v. Montreal Packing 

Co 

Edward Nelson & Co. v. Faber & Co. 
Elgin Loan and Savings Co. v. London 





572, 573 


7 Q.P.R. 448 


374 


11 Gr. 372 


450 


4 Gr. 603 


626 


23 Times L.R. 259. .. . 


411 


14 A.R. 166 


649 


26 C.P. 604 


509 


23 Gr. 207 


405, 406 


17 A.R. 481 


125 


7 P.R. 256 


. .434, 435 


1 O.W.R. 803, 2 O.W.R. 561 509 


Ir. R. 5 Eq. 523, 532.. 


90 


[1893] 1 Q.B. 629 


410, 426 


41 U.C.R. 313 


148 


17 P.R. 500 


. .430, 435, 436 


L.R. 2 Ch. 578 


570 


2 App. Cas. 284 


70 


21 Rev. Leg. 119 


576, 579 


13 O.W.R. 316 


124 


[1900] 1 Q.B. 629 


625 


4 Ex. D. 54 


Ill 


30 Ch.D. 189 


375 


. 

2 Coll. 342 


90 


3 Q.B.D. 432 


7, 8 


17 O.L.R. 292 


288 


[1903] 2 K.B. 367 


650 


11 O.L.R. 330 


:: . 82 



Ellis and Town of Renfrew, Re 21 O.L.R. 74, 23 O.L.R. 427. . . . 

340, 348, >352 

Ellis v. Barker L.R. 7 Ch. 104 309 

Embury v. West 15 A. R. 357. . . : 653 

Emmet v. Dewhurst 3 Macn. & G. 587 583 

Enoch and Zaretzky Bock & Co.’s 

Arbitration, In re [1910] 1 K.B. 327. 509, 521 

Essery v. Grand Trunk R.W. Co 21 O.R. 224 148, 151 

Etherington and Lancashire and York- 
shire Accident Insurance Co., In 

re [1909] 1 K.B. 591. . . .57, 58, 70, 75, 80 

Evelyn v. Lewis 3 Ha. 472 649 

Ewart v. Cochrane 4 Macq. H.L. 117 479 



Farquharson v. Barnard Argue Roth 



Fenton v. Thorley & Co. Limited 



Ferguson v. 



Filby v. Hounsell. 



25 O.L.R. 93 


650 


[1894] 1 Q.B. 552 


391 


12 O.L.R. 245 


602, 612 


9 P.R. 329 


391 


[1903] A.C. 443 


74 


8 P.R. 556 


602 


26 U.C.R. 26 


3 


9 B. & C. 59 


625 


26 O.L.R. 367 


602, 605 


[1896] A.C. 600, 611 


598 


[1896] 2 Ch. 737 


629 



XX 



CASES CITED. 



Name of Case. 



Where Reported. 



[VOL. 

Page. 
. . 207 



Fisher v. Fisher 1 O.W.R. 442. 

Fitzroy, Township of, v. County of 

Carleton 9 O.L.R. 686 199, 200 

Fleming, Re 11 P.R. 272, 285 177 

Fleming, Re 7 O.L.R. 651 295, 301 



Foley v. Fletcher 3 H. & N. 769. . 

Forster v. Forster and Berridge, Re. . 4 B. & S. 187. . . 

Fowler v. Fowler 33 Beav. 616. . . 

Foxwell v. Kennedy 24 O.L.R. 189. . 

Fuller v. Hooper 2 Ves. Sr. 242 — 

Fulton v. Andrew L.R. 7 H.L. 348. 

Fynn, In re 2 DeG. & S. 457. 

G. 



. . . . 120 
. . . . 401 

. ... no 

. . . . 107 
. . . . 90 

206, 215 
. ... 609 



Gardner v. Hodgson’s Kingston Brew- 
ery Co 

Garner v. Township of Stamford 

Gassiot, In re 

Gemmill v. Nelligan 

General Mutual Insurance Co. v. 

Sherwood *. . 

General Steam Navigation Co. v. 
British and Colonial Steam Navi- 
gation Co 

Gibbons v. Ogden 

Gibson v. Bott 

Gilbey v. Great Western R.W. Co. . . . 

Gilchrist. In re 

Giles v. Perkins 

Gillie v. Young 

Gissing v. T. Eaton Co 

Glossop v. Heston and Isleworth 

Local Board 

Glyn, Ex p 

Glynn v. Margetson & Co 

Going v. Hanlon 

Goldsmid v. Tunbridge Wells Im- 
provement Commissioners 

Goldstein v. Canadian Pacific R.W. 

Co 

Goodman v. Saltash Corporation 

Goodwin v. Waghorne 

Gordon v. Gordon 

Gordon v. Spencer 

Goss v. Lord Nugent 

Goubot v. De Crouy 

Government Stock and Other Securi- 
ties Investment Co. v. Manila 

R.W. Co 

Gowland v. Garbutt 

Grand Trunk R.W. Co. v. Attorney- 

General of Canada 

Grand Trunk R.W. Co. v. Griffith. . . . 
Grand Trunk R.W. Co. v. Huard. .... 

Grass v. Allan, In re 

Graves, Ex p 

Gray v. Garman 

Gray v. Smith 

Great Central R.W. Co. v. Lancashire 

and Yorkshire R.W. Co 

Green, Ex p 



[1903] A.C. 229 469 

7 O.L.R. 50 77 

70 L.J.N.S. Ch. 242 110 

26 0.R. 307 404 

14 How. S.C. 351, at p. 366 69 

L.R. 3 Ex. 330, L.R. 4 Ex. 238. . . 410 

9 Wheat. 1, 204 599 

7 Yes. 89, 96 120 

102 L.T.R. 202 75, 78 

[1907] 1 Ch. 1 546 

9 East 12 185 

1 O.L.R. 368 367, 374 

25 O.L.R. 50 309 

12 Ch.D. 102, at p. 122 52 

1 Mont. D. & DeG. 25 451 

[1893] A.C. 351, at p. 355 272 

4 Ir. R.C.L. 144 177 

L.R. 1 Eq. 161, L.R. 1 Ch. 349. . 
460, 474 

23 O.L.R. 536 437, 439 

7 App. Cas. 633, 648 475 

4 L.J.N.S. Ch. 172 451 

3 Swanst. 400 309 

2 Blackf. (Ind.) 286, 288 159 

5 B. & Ad. 58 583 

1 C. & M. 772 325 

[1897] A.C. 81 288 

13 Gr. 578 147 

[1907] A.C. 65, 68 598 

45 S.C.R. 380 79 

36 S.C.R. 655 410 

26 U.C.R. 123 390 

19 Ch.D. 1 578 

2 Hare 268 297 

43 Ch.D. 208 630 

13 Ry. & Canal Traffic Cas. 266. 593 
35 N.B.R. 137 596 



XXVI. 



CASES CITED. 



XXI 



Name of Case. 



Where Reported. Page. 



Green v. Bartlett 14 C.B.N.S. 681, 685 45 

Green v. Stevenson 9 O.L.R. 671 625, 626 

Grills v. Farah 21 O.L.R. 457 323, 324, 326, 329 

Gyde, Re 79 L.T.R. 261 176 

Gyfford v. Woodgate 11 East 297 325 



H. 

Habergham v. Ridehalgh 

Hague, Re 

Haig v. Swiney 

Haigh, Ex p 

Haldimand Dominion Election Case. . 

Hall v. Berry 

Hall v. Lees 

Hall v. Lund 

Hall v. Severne 

Hall v. Smith 

Halley, The 

Hammans v. Great Western R.W. Co. 

Hannam, In re 

Hansford v. Grand Trunk R.W. Co. . . 

Harrison, Re 

Harrison v. Guest 

Harrison v. Mobbs 

Hart v. Hart 

Hartopp v. Hartopp 

Hay and Town of Listowel, Re 

Hay v. Employers’ Liability Assur- 
ance Corporation 

Haynes v. Leland 

Hedges v. Harpur 

Heller v. Howard 

Hendrick v. Employers’ Liability 

Assurance Corporation 

Heney v. Low 

Hensey v. White 

Henwood v. Overend 

Hoare v. Osborne 

Hodge v. The Queen 

Hoeffler v. Irwin 

Hoghton v. Hoghton 

Holland, In re 

Holmes v. Kidd 

Holroyd v. Marshall 

Hooper v. Accidental Death Insurance 

Co 

Hooper v. Lane 

Hope v. Hope 

Hopkins, Re, Barnes v. Hopkins 

Horsfall v. Boisseau 

Hotchkiss’s Trusts, In re 

Houlihan v. Preferred Accident In- 
surance Co. of New York 

Hoyle, In re 

Huguenin v. Baseley 

Humphrys v. Polak 

Hussey v. Horne-Payne 

Hutchinson, Re ! 

Hyman v. Van den Bergh 



L.R. 9 Eq. 395 300 

14 O.R. 660 404 

I Sim. & Stu. 487 177 

II Ves. 403 450 

1 Ont. Elec. Cas. 529 340 

10 O.W.R. 954 623 

[1904] 2 K.B. 602 411 

1 H. & C. 676 479 

9 Sim. 515 87, 89, 90 

2 Bing. 156 425 

L.R. 2 P.C. 193 412 

4 Rv. & Canal Traffic Cas. 181 . . 593 
[1897] 2 Ch. 39 295, 299 

13 O.W.R. 1184 410, 411, 425 

31 O.R. 314 207, 375 

2 Jur. N.S. 911 307, 309 

12 O.W.R. 465 625 

18 Ch.D. 670 7 

21 Beav. 259 309 

28 O.R. 332 556 

6 O.W.R. 459 82 

29 Me. 233, 234, 243 159 

3 DeG. & J. 129 120 

11 111. App. 554 159 

62 Fed. Repr. 893 10 

9 Gr. 265 403 

[1900] 1 Q.B. 481, at p. 485 73 

1 Mer. 23 87, 89 

L.R. 1 Eq. 585 110 

9 App. Cas. 117 598 

8 O.L.R. 740 625 

15 Beav. 278 309 

[1902] 2 Ch. 360 626, 630 

3 H. & N. 891 184 

10 H.L.C. 191, 9 Jur. N.S. 213, 2 

DeG. F. & J. 596 564, 567 

5H. &N. 546 11 

6 H.L.C. 443 622 

8 DeG. M. & G. 731 607 

8 P.R. 160 404 

21 A.R. 663 569 

L.R. 8 Eq. 643 295, 298 

145 N.Y. St. Repr. 1048 57, 64 

[1893] 1 Ch. 84 626, 630 

14 Ves. 273 309 

[1901] 2 K.B. 385 602, 607 

4 App. Cas. 311 625, 630 

26 O.L.R. 113 367, 371 

[1908] 1 Ch. 167 466 



I. 

Ilchester, Earl of, Ex p 7 Ves. 348 



372, 373 



XXII 



CASES CITED. 



[VOL. 

Name of Case. Where' Reported. Page. 

Ilfracombe R.W. Co. v. Devon and 

Somerset R.W. Co L.R. 2 C.P. 15 326 

Illingworth v. Houldsworth [1904] A.C. 355 650 

Ive v. King 16 Beav. 46 297 



J. 



Jansen, In re 12 O.L.R. 63 207 

Jarrett v. Hunter 34 Ch.D. 182 629 

Jenkins v. Wilcock 11 C.P. 505 323, 326, 330 

John Griffiths Cycle Corporation Lim- 
ited v. Humber & Co. Limited. . . [1899] 2 Q.B. 414 629 

Johnston v. Wade 17 O.L.R. 372 279, 284, 286, 287 

Jolly v. Rees 15 C.B.N.S. 628 572, 573 

Jones v. Bank of Upper Canada 12 Gr. 429, 13 Gr. 74 450 

Jones v. Chapman 5 Blackf. (Ind.) 88 159 

Jones v. Sculiard [1898] 2 Q.B. 565 412 

Jordan v. Provincial Provident Insti- 
tution 28 S.C.R. 554 75, 82 

Joshua Stubbs Limited, In re [1891] 1 Ch. 187 644 

Jurisdiction of a Province to Legislate 
Respecting Abstention from La- 
bour on Sunday, In re 35 S.C.R. 581 591 



K. 



Keighley Maxsted & Co. v. Durant & 

Co 

Kelly v. Kelly 

Kennedy v. Kennedy 

Kennedy v. Kennedy 

Kennedy v. Oldham 

Kensington, Ex p 

Kessowji Issur v. Great Indian Pen- 
insula R.W. Co 

Keys, Re 

Kilroy v. Simkins 

King v. Waring 

Kinghorn and City of Kingston, Re. . . 
Kingston, City of, v. Kingston, etc., 

R.W. Co 

Kinnaird v. Trollope 

Kitching v. Hicks 

Knill v. Towse 

Knox v. Gye 

Kreh v. Moses 

Kruse v. Johnson 

Kurtz and Co. v. Spence and Sons. . . . 



L. 



Lacon v. Allen 

Lafrance v. Lafrance 

Lambert, In re 

Lands Allotment Co., In re 

Lanphier v. Buck 

Lawrence v. Accidental Insurance Co. 

Lawson v. McGeoch 

Lecone v. Sheires 

Leconfield v. Lonsdale 

Lee v. Arthur 

Lewis, Re 

Leyton Urban District Council v. 

Chew 



[1901] A.C. 240 


624, 626 


20 Man. L.R. 579 


249 


24 O.L.R. 183 


107 


13 O.W.R. 984 


107 


15 O.R. 433 


630 


2 Yes. & B. 79 


450 


96 L.T.R. 859 


.510, 517, 521 


12 O.W.R. 160 


602 


26 C.P. 281 


184 


5 Esp. 13 


.155, 156, 159 


26 U.C.R. 130 


556 


.23 O.R. 399, 25 A.R. 462 


50 


39 Ch.D. 636 


152 


6 O.R. 739 


288, 569 


24 Q.B.D. 186, 198 


341 


L.R. 5 H.L. 656 


253 


22 O.R. 307 


207 


[1898] 2 Q.B. 91 


558, 560 


58 L.T.R. 438 


.309, 310, 315 


!• 

3 Drew. 579 


450, 451 


18 P.R. 62 


' 7 


[1908] 2 Ch. 117 


300 


[1894] 1 Ch. 616, at p. 632 253 


34 L.J. Ch. 650, 656 


299 


7 Q.B.D. 216 


57, 58, 67, 73 


20 A.R. 464 


653 


1 Vern. 442 


372 


L.R. 5 C.P. 657, 726. . . 


471 


100 L.T.R. 61, 62 


.332, 335, 338 


11 P.R. 107 


. . .83, 84, 86 


[1907] 2 K.B. 283 


561 



xxvi]. 



CASES CITED. 



XXIII 



Name of Case. Where Reported. Page. 



L’Herminier, In re 

Lime Rock Bank v. Mallett 

Lincoln Election Petition, Re 

Lindsay v. Lindsay 

Lints v. Lints 

Liverpool and London and Globe In- 
surance Co. v. Agricultural Sav- 
ings and Loan Co 

Lloyd v. Davis 

Lloyd v. Matthews 

Locators v. Clough 

London and North-Western R.W. Co. 

v. Evans 

London Pressed Hinge Co., In re 

Long, In re, Exp. Cuddeford 

Long v. Millar 

Longaker, Re 

Longendale Cotton Spinning Co., In 

re 

Lord’s Day Act of Ontario, Re 

Loring v. Thomas 

Low v. Guthrie 

Luckhardt, Re 

Lundy v. Lundy 

Lyons v. Blenkin 



[1894] 1 Ch. 675 177 

42 Me. 349, 358 185 

4 A.R. 206 340, 355, 356 

23 Gr. 210 406, 407 

6 O.L.R. 100 207 



33 S.C.R. 94 80 

3 L.J.O.S.K.B. 38 185 

51N.Y. 124 46 

17 Man. L.R. 659 43, 45, 47 

[1892] 2 Ch. 432 471 

[1905] 1 Ch. 576 286 

20Q.B.D. 316 331 

4C.P.D. 450 625 

12 O.W.R. 1193 602 

8 Ch.D. 150 644 

1 O.W.R. 312 590 

1 Dr. & Sm. 497, 510. . . .295, 296, 300 

[1909] A.C. 278 205, 206 

29 O.R. Ill 408 

24 S.C.R. 650 616, 621 

Jac. 245 116 



M. 



McCaffrey v. McCaffrey 

McCartan v. Belfast Harbour Com- 
missioners 

McCrae v. Molsons Bank 

McCumber and Doyle, In re 

McDonald v. Murray 

McEwan v. Milne 

McGrath and Town of Durham, In re. 

McGregor v. McGregor. . 

McGuin v. Fretts 

McIntyre Brothers v. McGavin 

McKeand v. Canadian Pacific R.W. 

Co 

Mackenzie v. Maple Mountain Mining 

Co 

Mackenzie v. Sligo and Shannon R.W. 

Co 

McKinnon v. Lundy 

McLeod v. Emigh (2), Re 

McRoberts v. Steinoff 

Maddison v. Alderson 

Malcolm v. Ferguson 

Man v. Ricketts 

Mannox v. Greener 

Mansell v. Clements 

Manufacturers’ Accident Indemnity 

Co. v. Dorgan 

Mardorf v. Accident Insurance Co. . . . 

Marine Mansions Co., In re 

Marsh v. Astoria Lodge 

Marsh v. Joseph 

Martin v. Mackonochie 

Martin v. Martin & Co 

Martindale v. Clarkson 

Mason v. MacDonald 



18 A.R. 599 206, 225, 309 

44 Irish Law Times 223 412, 425 

25 Gr. 519 653 

26 U.C.R. 516 391, 396 

2 O.R. 573, 11 A.R. 101. ... . .629, 630 

5 O.R. 100 207 

17 O.L.R. 514 340, 348 

21 Q.B.D. 424 7 

13 O.R. 699 649 

[1893] A.C. 268 461 

Not reported 79 

20 O.L.R. 615 378 

4 E. & B. 120 326 

24 O.R. 132, 21 A.R. 560 616, 621 

12 P.R. 503 399 

11 O.R. 369 653 

8 App. Cas. 467, 488 582, 625 

14 O.W.R. 737, 1 O.W.N. 77 206 

7 Beav. 93, 101 85 

L.R. 14 Eq. 456, 462 177 

L.R. 9 C. P.139 45 

58 Fed. Repr. 945 57, 58, 66, 67 

[1903] 1 K.B. 584 57, 68 

L.R. 4 Eq. 601, 610 649 

27 111. 421 493 

[1897] 1 Ch. 213 624 

3 Q.B.D. 730, 4 Q.B.D. 697. .391, 401 

[1897] 1 Q.B. 429 336 

6 A.R. 1, 6 408 

25C.P. 435 569 



XXIV 



CASES CITED. 



[VOL. 



Name of Case. 

Masuret v. Mitchell 

Matthew Guy Carriage and Auto- 
mobile Co., Re, Thomas’s Case. . 
Maudslay Sons & Field, In re, Mauds] ay 
v. Maudslay Sons & Field 

Mendels v. Gibson 

Metcalfe, In re 

Metcalfe v. Hutchinson 

Midland R.W. Co. v. Guardians of 

Edmonton Union 

Miles, Re 

Miles v. New Zealand Alford Estate 

Co 

Mill v. Commissioner of New Forest.. 

Milroy v. Lord 

Mingeaud v. Packer 

Molsons Bank v. Beaudry 

Mones v. McCallum 

Monypenny v. Dering 

Moore v. Campbell 

Moore v. Kirkland 

Morel Brothers & Co. Limited v. Earl 

of Westmoreland 

Morgan v. Chetwynd 

Morgan v. Johnson 

Morlock and Cline Limited, Re, Sarvis 

and Canning’s Claims 

Morrow v. Jenkins 

Mountfort, Exp 

Mountfort, Ex p 

Munsen v. Hauss 

Murray. Re 

Murray v. Canada Central R.W. Co. . 

N. 



Where Reported. Page. 

26 Gr. 435 450 

3 O.W.N. 902 262 

[1900] 1 Ch. 602 4 

9 0.L.R. 94 147 

[1909] 1 Ch. 424 296 

1 Ch.D. 591, at p. 594 177 

[1895] 1 Q.B. 357 391, 395 

14 0.L.R. 241 90 

32 Ch.D. 266 308, 310 

18 C.B. 60 471 

4 DeG. F. & J. 264 207 

21 O.R. 267, 19 A.R. 290 207, 375 

Q.R. 11 K.B. 212 291, 292 

17 P.R. 398 649 

2 D.M. & G. 145 175 

10 Ex. 323, 332 582 

5 C.P. 452 323, 326, 330 

[1903] 1 K.B. 64, [1904] A.C. 11. . 572 
4 F. & F. 451, 457 574 

3 O.W.N. 297 629 

23 O.L.R. 165 377, 381 

6 O.R. 693 177 

14Ves. 606 450 

15Ves. 445 372 

22 Gr. 279 147 

4 0.W.R. 281 207 

7 A.R. 646, 655 509 



Nalder v. Hawkins 2 My. & K. 243 375 

National Debenture and Assets Cor- 
poration, In re [1891] 2 Ch. 505, 516 510 

National Telephone Co. v. Constables 

of St. Peter Port [1900] A.C. 317, 321 649 

Neath Harbour Smelting and Rolling 

Works, In re 2 Times L.R. 94 510 

Neaverson v. Peterborough Rural Dis- 
trict Council [1901] 1 Ch. 22, [1902] 1 Ch. 

557 471,475,483 

Neilson v. Trusts Corporation of 

Ontario 24 O.R. 517 : 207 

New Hamburg Manufacturing Co. v. 

Webb 23 O.L.R. 44 477 

Newburgh Associate Reformed Church 
Trustees v. Princeton Theological 

Seminary Trustees 4 N.J. Eq. 77 103 

Newell v. Radford L.R. 3 C.P. 52 630 

Nicholl v. Elliott 3 Gr. 536 434 

Nixon v. Brownlow 1 H. & N. 405 325 

Nobel’s Explosives Co. v. Jones 17 Ch.D. 721, at p. 739. .204, 206, 212 

Noble v. Ward L.R. 2 Ex. 135 582 

North British R.W. Co. v. Wood 18 Ct. of Sess. Cas. (4th Series) 

27 306 

Northrup v. Railway Passenger Assur- 
ance Co 43 N.Y. 516 11, 64 

Norton v. Smith 20 U.C.R. 213 404 



XXVI.] 



CASES CITED. 



XXV 



Name of Case. Where Reported. Page. 

Nott v. Stoddard 38 Vt. 25, 31 159 

Nottawasaga, In re Township of, and 

County of Simcoe 4 O.L.R. 1 391 

' 0. 

Ockford v. Freston 6 H. & N. 466 622 

O’Donnell v. Nee 86 Fed. Repr. 96 159 

0’ Farrell v. Limerick and Waterford 

R.W. Co 13 Ir. L.R. 365 400 

O’Hara, In re [1900] 2 I.R. 232 607, 610 

Oliver v. Hunting 44 Ch.D. 205 630 

Ooregum Gold Mining Co. of India v. 

Roper [1892] A.C. 125 254, 260, 261, 262 

Orangeville Local Option By-law, 

Re 20 O.L.R. 476 339, 340, 342, 346, 

cmq 

Ouimet v. Bazin 48 C.L.J. 439 601 

Oulds v. Harrison 10 Ex. 572 184 

Overend Gurney & Co., In re, Ex p. 

Swan L.R. 6 Eq. 344. . 184 

Overton v. Banister . 3 Hare 503 455 



P. 



Page v. Leapingwell 

Palmer, In re 

Palmer v. Hendrie 

Palmer v. Justice Assurance Society . . 

Parke v. Riley 

Parker v. Mitchell 

Parker v. Odette 

Parkes v. St. George 

Patapsco Insurance Co. v. Coulter. . . 

Pavey v. Davidson 

Paxton v. Jones 

Pearce v. Gardner 

Peck and Township of Ameliasburg, 

Re 

Peel v. Catlow 

People v. Doris 

People v. Muller 

Perry v. Barker 

Perth Flax and Cordage Co., Re 

Phillips v. Mullings 

Phillips v. Nairne 

Pine Hill Lutheran Congregation Trus- 
tees v. St. Michael’s Evangelical 

Church of Pine Hill 

Pirie v. Wyld 

Platt v. Forty-Second St. and Grand 

St. Ferry R.R. Co 

Polak v. Everett 

Portuguese Consolidated Copper 
Mines Limited, Re, Exp. Badman, 

Ex p. Bosanquet 

Potter v. Duffield 

Potter’s Trust, In re 

Power v. Griffin 

Powis v. Ontario Accident Insurance 

Co 

Pratt v. Bunnell 



18Ves. 463 177 

[1893] 3 Ch. 369 301 

27 Beav. 349, 28 Beav. 341 

145, 147, 153 

6 E. & B. 1015 326 

3 E. & A. 215 404 

11 A. & E. 788 466 

16 P.R. 69 4 

2 0.R. 342 569 

3 Peters (S.C.) 222, at p. 233 ... . 69 

23A.R. 9 3 

APT? 1Q£ 404 

[1897] 'l Q.B. 688. V. ... V. ... .626, 630 

17 0.R. 54 556 

9 Sim. 372 298 

14 App. Div. N.Y. 117 137 

96N.Y. 408 137 

13Ves. 198 147 

13 0.W.R. 1140 279, 288 

L.R. 7 Ch. 244 206, 225 

4 C.B. 343, at pp. 350, 351 69 



48 Pa. St. 20 103 

11 O.R. 422 303, 309, 315, 323 

2 Hun (N.Y.) 124 10, 13 

1 Q.B. D. 669 185 



45 Ch.D. 16 625 

L.R. 18 Eq. 4 624, 629 

L.R. 8 Eq. 52 295, 298 

33 S.C.R. 39 398 



1 O.L.R. 54. 
21 O.R. 1. . . 



11 

404 



XXVI 



CASES CITED. 



[VOL. 

Pridie v. Field 19 Beav. 497 120 

Prince v. Oriental Bank Corporation.. 3 App. Cas. 325 3 

Purdom v. Pavey & Co 26 S.C.R. 412 3 

Q. 

Queen City Plate Glass Co., Re, East- 

mure’s Case 1 O.W.N. 863 377, 380 

Queen’s College v. Jayne , 10 O.L.R. 319 625 

Quilter v. Mapleson 9 Q.B.D. 672 511, 547 



R. 



Railroad v. Delaney 

Rainy Lake Lumber Co., In re 

Rangeley v. Midland R.W. Co 

Raven Lake Portland Cement Co., Re, 
National Trust Co. v. Trusts and 

Guarantee Co 

Regina v. Bailey 

Regina v. Barnardo 

Regina v. Boyd 

Regina v. Cameron 

Regina v. France 

Regina v. Gyngall 

Regina v. Halifax Electric Tramway 

Co 

Regina v. Hicklin 

Regina v. James 

Regina v. Jones 

Regina v. Justices of Kent 

Regina v. Lambour Valley R.W. Co. . 

Regina v. Laurence 

Regina v. Lushington, Exp. Otto 

Regina v. McIntosh 

Regina v. McNamara 

Regina v. Mayor of London 

Regina v. Murray 

Regina v. Neville 



102 Term. 289, 294, 

15 A.R. 749 

L.R. 3 Ch. 306, 310 



295. 



159 

649 

471 



Regina v. Norton. . . 
Regina v. Parker . . . 
Regina v. Patterson . 
Regina v. St. Clair. . 
Regina v. Smith 



Regina v. Stafford 

Regina v. Weir (No. 3) 

Regina v. Weir (No. 5) 

Regina v. Wright 

Regina ex rel. Clancy v. Conway. 
Regina ex rel. Clanc}^ v. St. Jean. 



Regina ex rel. Grayson v. Bell . . 
Regina ex rel. Halsted v. Ferris. 
Regina ex rel. Moore v. Nagle . . 

Rex v. Bates 

Rex v. Beaver 

Rex v. Beeston 

Rex v. Benson 

Rex v. Corrigan 

Rex v. James 

Rex v. Key 



24 O.L.R. 286 280 

6CoxC.C. 29.. 500 

23 Q.B.D. 305 372, 602 

Q.R. 5 Q.B. 1, 4 Can. Crim. Cas. 

219 497, 500, 501, 504, 505, 507 

2 Can. Crim. Cas. 173 507 

1 Can. Crim. Cas. 321 488 

[1893] 2 Q.B. 232. . . .602, 607, 609, 611 

30N.S.R. 469 596 

L.R. 3 Q.B. 360 137 

12 Cox C.C. 127 499 

[1898] 1 Q.B. 119 506 

24 Q.B.D. 181 '399 

22 Q.B.D. 463 51 

1 Can. Crim. Cas. 295 18 

[1894] 1 Q.B. 420 488 

28 O.R. 603 389, 391, 397 

20O.R. 489 18 

69L.T.R. 721 399 

27 U.C.R. 134. 391, 396 

Crawford & Dix’s Notes of Cases 

96, 97 511 

16 Cox C.C. 59 499 

9C. &P. 45 64 

26 O.R. 656 502 

27 A.R. 308 18 

17 Jur. 24, 22 L.J.N.S.Q.B. 116, 

16 Eng. L. & Eq. 221 606 

1 Can. Crim. Cas. 239 24 

3 Can. Crim. Cas. 262. . .500, 502, 507 

3 Can. Crim. Cas. 499, 503 507 

2 F. & F. 320 500 

46 U.C.R. 85 263, 269, 272, 274 

46 U.C.R. 77, at pp. 81, 82 

269, 272, 274 

1 U.C.L.J.N.S. 130 270, 272 

6 U.C.L.J.N.S. 266 270, 272 

24 O.R. 507 271 

[1911] 1 K.B. 964 504 

9 O.L.R. 418 137, 141 

q T r? KQO ko 

[1908] 2 K.B. 270. 7. . '. .’.500, 504, 505 

20 O.L.R. 99 504 

[1902] 1 K.B. 540 482 

1 Cr. App. R. 135 137 



xxvi]. 



CASES CITED. 



XXYII 



Name of Case. 

Rex v. Komiensky 

Rex v. Larwood 

Rex y. Lee Guey 

Rex y. Lovitt 

Rex v. Mayor, etc., of Winchester. . . . 

Rex v. O’ Gorman 

Rex v. Swyer 

Rex v. Thompson 

Rex v. Ward 

Rex v. Wener 

Rex v. Wheatly 

Rex v. White 

Rex ex rel. Ivison v. Irwin 

Reynolds v. Accidental Insurance Co. 
Ricardo v. Maidenhead Local Board 

of Health 

Rice v. Galbraith 

Richard Evans & Co. Ltd. v. Astley. . 

Richards v. Fry 

Richards v. Jenkins 

Richardson, In re 

Richardson v. Alpena 

Richardson v. Great Eastern R. W. Co. 

Rickard v. Robson 

Ridgeway v. Darwin 

Ridgway v. Wharton 

Riel v. The Queen 

Roberts, In re 

Roberts, In re 

Roberts v. Hall 

Robertson, Re 

Robertson v. French 

Robertson v. Robertson 

Robinson v. Canadian Pacific R.W. 

Co 

Robinson v. Grave 

Robinson v. Hardcastle 

Robinson v. Page 

Rochdale Canal Co. v. Radcliffe 

Rodhouse v. Mold 

Rogers v. Clifton 

Rogers v. Ingham 

Rolland V. La Caisse d’Economie 

Notre Dame de Quebec 

Rosenbaum v. Belson 

Rosher, In re 

Ross v. Grand Trunk R.W. Co 

Ross v. Township of London 

Rossiter v. Miller 

Rourke v. Robinson 

Routledge v. Dorril 

Rowland v. McCallum, Re 

Royal Canadian Bank v. Cummer. . . . 

Royal -Canadian Bank v. Ross 

Rudge v. Richens 

Rush and Village of Bobcaygeon, In 

re 

Russel v. Russel 



Where Reported. 



Page. 



6 Can. Crim. Cas. 524 17, 18, 22 

Carthew 306 275 

15 O.L.R. 235 488, 489 

[1912] A.C. 212 1, 3, 5 

7 A. &E. 215 269 

18 O.L.R. 427 18 

10 B. & C. 486 268 

17 Man. L.R. 608 17, 22, 27 

4 A. & E. 384 472 

6 Can. Crim. Cas. 406. .17, 18, 21, 22 

2 Burr. 1125 499 

18 O.L.R. 640 489 

4 O.L.R. 192 340 

22 L.T.N.S. 820 57, 70 

2 H. & N. 257 401 

26 O.L.R. 43 587 

[1911] A.C. 674, 678 79 

7 A. & E. 698 466 

17 Q.B.D. 544, 18 Q.B.D. 451. .. . 290 

L.R. 12 Eq. 398 148, 151 

40 Mich. 203 648 

1C.P.D. 342 125 

31 Beav. 244 105, 108, 110 

8 Yes. 65 511 

6H.L.C. 238 626 

10 App. Cas. 675 595 

3Atk. 308, 312 510 

[1905] 1 Ch. 704 309 

1 O.R. 388 116, 602, 606, 607 

24 Gr. 442 406 

4 East 130, at pp. 135, 136 71 

25 Gr. 486 404, 405, 406, 407, 408 

23 O.L.R. 536 437, 439 

27 L.T.N.S. 648 477 

2 Bro. C.C. 22 175 

3 Russ. 114, 121. 584 

18 Q.B. 287 471, 475, 483 

35 L.J.Ch. 67 176 

3 B. & P. 587 157 

3 Ch.D. 351, atp. 355 120 

24 S.C.R. 405 645, 649 

[1900] 2 Ch. 267 629 

26 Ch.D. 801 175 

10 O.R. 447 151 

20 O.L.R. 578, 23 O.L.R. 74. .48, 49, 50 

3 App. Cas. 1124 630 

[1911] 1 Ch. 480 147 

2Ves. Jr. 356 175 

22 O.L.R. 418 \ . 390 

15 Gr. 627 450 

40U.C.R. 466 653 

L.R. 8 C.P. 358 152 

44 U.C.R. 199 391, 396 

1 Bro. C.C. 269 449, 450 



S. 

St. John (Lord) v. Lady St. John .... 11 Ves. 526, 531 607 

Sager v. Sheffer 2 O.W.N. 671 43, 45, 47 

Salford, Mayor, etc., of, v. County 

Council of Lancashire 25 Q.B.D. 384 53 



XXVIII 



CASES CITED. 



[VOL. 



Name of Case. Where Reported. Page. 

Salisbury, Marquis of, v. Ray 8 C.B.N.S. 193 ; 331 

Saltash, Corporation of, v. Jackman.. 1 D. & L. 851 338 

Saltfleet, In re Local Option By-law 

of the Township of 16 O.L.R. 293 339, 340, 342, 346 

348, 352, 359 

Sandys, Exp 42 Ch.D. 98, 117 257 

Savill Brothers Limited v. Bethell. . . [1902] 2 Ch. 523, 537 648 

Scott v. Canadian Pacific R.W. Co. . . 19 Man. L.R. 165 125 

Sealy, Re 85 L.T.R. 451 90 

Sellars v. Village of Dutton 7 O.L.R. 646 .48, 50 

Shaftsbury v. Hannam Finch’s Reports 323 372 

Shelford v. Louth and East Coast R. 

W. Co 4 Ex. D. 317 511 

Sheppard v. Sheppard 14 Gr. 174 406 

Sherer v. Bishop 4 Bro. C.C. 55 89 

Shinglemeyer v. Wright 124 Mich. 230, 240 159 

Shoe Machinery Co. v. Cutlan [1896] 1 Ch. 108, 114 510 

Siddons v. Short 2 C.P.D. 572 478, 480 

Simmons v. “Liberal Opinion” (Lim- 
ited), Re Dunn 27 Times L.R. 278 494 

Simmons v. Mailing Rural District 

Council [1897] 2 Q.B. 433 561 

Simmons v. Montague [1909] 1 I.R. 87 451 

Sinclair and Town of Owen Sound, Re. 13 O.L R. 447 340 

Singer v. Russell 25 O.L.R. 444 44 

Skelton v. Cole 1 DeG. & J. 587 624 

Skinner & Co. v. Shew & Co. [1893] 1 Ch. 413 511 

Slattery v. Naylor 13 App. Cas. 446 561 

Slingsby, The 120 Fed. Repr. 748 417 

Smith v. Chorley District Council [1897] 1 Q.B. 532 52 

Smith v. Mason 17 P.R. 444 376 

Smith v. Norton 7 U.C.L.J.O.S. 263 403 

Smith v. Smith 8 Sim. 353 295 

Smith v. Wood 3 Camp. 323, 14 P.R. 752. . .155, 156, 

157, 159 

Smyth, Ex p 3 A. & E. 719 401 

’'South Eastern R.W. Co. v. Associated 
Portland Cement Manufacturers 

(1900) Limited [1910] 1 Ch. 12 648 

South Essex Estuary and Reclamation 

Co., In re L.R. 4 Ch. 215 565, 570 

South Grenville Election, Jones’s 

Case H.E.C. 163, 176 278 

Standard Realty Co. v. Nicholson.. . . 24 O.L.R. 46 626 

Standard Trading Co. v. Seybold 1 O.W.R. 650 430, 431, 435 

Stapilton v. Stapilton 1 Atk. 2 309 

Starr v. Mayor, etc., of Exeter 3 Lev. 116 275 

State v. McKee 73 Conn. 18 137 

Steere v. Smith 2 Times L.R. 131 45 

Stewart v. Pere Marquette R.W. Co.. 6 O.W.R. 724 410 

Stiles v. Galinski [1904] 1 K.B. 615 560 

Story, Exp 12 C.B. 767, 777 391 

Stowell v. Robinson 3 Bing. N.C. 928 583 

Stratheden, Lord, and Campbell, In 

re [1894] 3 Ch. 265 175, 181 

Stratton v. Vachon 44 S.C.R. 395 44, 45, 47, 585, 587 

Stroud v. Lawson [1898] 2 Q.B. 44 649 

Strong v. Lewis 1 Gr. 443, 445 404 

Studds v. Watson 28 Ch.D. 305 626 

Sturtevant v. Ford 4 M. & G. 101 196 

Sussex, The [1904] P. 236 411 

Suter v. Merchants Bank 24 Gr. 365. 653, 654 

Sutherland v. Grand Trunk R.W. Co. 18 O.L.R. 139 437, 439 



XXVI.] 



CASES CITED. 



XXIX 



Name of Case. Where Reported. Page. 

Sutton v. Smith 13 Mo. 120, 123, 124 159 

Swain, In re [1905] 1 Ch. 669 173, 176 

Swainson v. North Eastern R.W. Co. . 3 Ex. D. 341 411, 417 

Swan v. North British Australasian 

Co 32 L.J. Ex. 273 649 

T. 



Tailby v. Official Receiver 

Templer, Ex p 

Tennant v. Union Bank 

Tennent v. Tennents 

Tewkesbury Gas Co., In re 

Theobald v. Railway Passengers As- 
surance Corporation 

Thibaudeau v. Paul 

Thirkell, Re, Perrin v. Wood 

Thomas v. Brown 

Thomas v. Sutters 

Thompson v. Giles 

Thomson v. Shakespear 

Thorndyke v. Thorndyke 

Thornhill v. Thornhill 

Thorpe v. Richards 

Thuman v. Best 

Thuresson, In re 

Thynne v. Earl of Glengall 

Tone, Conservators of the River, v. 
Ash 



13 App. Cas. 523 238 

Saund. &C. 169 113, 116 

19 A.R. 1 653 

L.R. 2 Sc. & D. 6 309 

[1911] 2 Ch. 279, [1912] 1 Ch. 1.. . 648 

10 Ex. 45 11 



26 O.R. 385 




.279, 288 


21 Gr. 492 




.... 569 


1 Q.B.D. 714 




.... 625 


[1907] 1 Ch. 10. 15.... 




.... 600 


2 B. & C. 422 




.... 185 


1 DeG. F. & J. 399... 


...105, 


108, 109 


1 O.W.R. 11 




.... 207 


4 Madd. 377 


. . .295, 


298, 299 


15 Gr. 403 




.... 406 


97 L.T.R. 239 




.... 629 


3 O.L.R. 271 




.... 147 


2 H.L.C. 131 




.... 625 



10 B. & C. 349, 8 L.J.O.S.K.B. 

226 493 



Tooley v. Railway Passenger Assur- 
ance Co 2 Ins. L.J. 275 11 

Toronto, City of, v. Schultz 19 O.W.R. 1013 554, 557 

Toronto Cream and Butter Co. v. 



Crown Bank 16 O.L.R. 400 648, 650, 653, 655 

Toronto Public Library Board v. City 

of Toronto 19 P.R. 329, 332 50 

Townshend’s (Lord) Settlement, In 

re [1908] 1 Ch. 201 528 

Trevor v. Whitworth 12 App. Cas. 409 261, 262 

Trew v. Railway Passengers Assur- 
ance Co 5 H. & N. 211, 7 Jur. N.S. 878. . . 70 

Trumble v. Hortin 22 A.R. 51 521 



Trusts and Guarantee Co. v. Hart. ... 31 O.R. 414, 2 O.L.R. 251, 32 S.C. 

R. 553 207, 309 

Tyler, In re [1891] 3 Ch. 252 181 

Tyrrell v. Painton [1894] P. 151 205, 206, 215 

Tytler v. Canadian Pacific R.W. Co.. 29 O.R. 654 2, 5 



U. 

Union Steamship Co. Limited v. Clar- 

idge [1894] A.C. 185 411, 425 

United States v. Bennett 16 Blatchf. (Circuit Court) 338. . 137 

United States v. Bradley 10 Peters 343 269 

United States Bank v. Dandridge. ... 12 Wheat. 64 270 



V. 

Valentini v. Canali 24 Q.B.D. 166 455 

Yalletort Sanitary Steam Laundry 

Co., In re [1903] 2 Ch. 654 650 

Vandenbergh v. Spooner L.R. 1 Ex. 316 625 



XXX 



CASES CITED. 



[VOL. 



Where Reported. 



Page. 
. . 207 



Name of Case. 

Yandusen v. Young 1 O.W.R. 55 

Vano v. Canadian Coloured Cotton 

Mills Co 21 O.L.R. 144 375 

Venner v. Sun Life Insurance Co 17 S.C.R. 394 75, 81 

Vezina v. Will H. Newsome Co 14 O.L.R. 658 3 

Victoria, County of, v. County of 

Peterborough 15 A.R. 617, 627, Cameron’s Sup. 

Ct. Cas. 608 199 

Victoria Steamboats Limited, In re. . [1897] 1 Ch. 158 649 



W. 



Waldock v. Winfield 

Walker v. Jones 

Walker v. Maitland 

Wallis y. Andrews 

Wallis v. Solicitor-General for New 

Zealand 

Warburton v. Great Western R.W. Co. 

Ward v. Robins 

Warmoll v. Young 

Warr v. Jolly 

Waterhouse v. Jameson 

Waters v. Merchants’ Louisville In- 
surance Co , 

Waters v. Waters 

Waugh v. Waugh 

Weatherston v. Hawkins 

Webster’s Estate, In re 

Welton v. Saffery 

Westbrook v. Australian Royal Mail 

Steam Navigation Co 

Western National Bank of City of New 

York v. Perez Triana & Co 

Westmeath’s (Lord) Case 

Weston Local Option By-law, Re .... 

Wharton v. Masterman .... 

White, In re 

White v. Bastedo 

White v. Newcomb 

White v. Tomalin 

White v. Wilson 

Wicks v. Dowell & Co. Limited 

Wilkinson v. Alston 

William Whiteley Limited v. The King 

Williams, Re 

Williams, Re 

Williams v. Jordan 

Williams v. Lake 

Williams v. Township of Raleigh 

Williston v. Lawson 

Wilson v. Kelland 

Winspear v. Accident Insurance Co. . . 

Winter v. Mouseley 

Wood v. Waud 

Wood v. Wood 

Woolrich, In re 

Worthing Corporation v. Heather. . . . 

Worthington v. Jeffries 

Wright v. Kerrigan 

Wright v. Lainson 

Wright v. Williams 



[1901] 2 K.B. 596 426 

L.R. 1 P.C. 50 147 

5 B. & Aid. 171, at p. 175 69 

16 Gr. 624 207, 307 

[1903] A.C. 173 176 

L.R. 2 Ex. 30 411 

15 M. & W. 237, 242 466 

5 B. & C. 660 324 

6 C. & C, 497 157 

L.R. 2 H.L. Sc. 29, at p. 38. .... 570 

11 Peters (S.C.) 213 69 

2 DeG. & Sm. 591, 599 86 

2 My. & K. 41 298 

1 T.R. 110 155, 157 

23 Ch.D. 737, 739 299 

[1897] A.C. 299 258, 260 

23 L.J.N.S.C.P. 42 332, 338 

[1891] 1 Q.B. 304 6 

Jacob 251, note (c) 605 

9 O.W.R. 250 340 

[1895] A.C. 186. .. , 177 

[1893] 2 Ch. 41 174 

15 Gr. 546 407 

25 App. Div. N.Y. 397, 401. . . ... 159 

19 O.R. 513 625, 629 

13 Ves. 87, at p. 91 86 

[1905] 2 K.B. 225 57, 68 

48 L.J.Q.B. 733 43, 45, 47 

101 L.T.R. 741 120 

5 O.L.R. 345 295 

7 O.L.R. 156 404, 407 

6 Ch.D. 517 624 

2 E. & E. 349 629 

14 P.R. 50 332, 333, 338 

19 S.C.R. 673 625 

[1910] 2 Ch. 306.. 649 

6 Q.B.D. 42 57, 58, 66, 73 

2 B. & Aid. 802, at p. 806 120 

3 Ex. 748 474 

57 L.J.N.S. Ch. 1 7 

11 Ch.D. 663 295 

[1906] 2 Ch. 532, at p. 538 177 

L.R. 10 C.P. 379... 401 

[1911] 2 I.R. 301 78 

2 M. & W. 739 324 

1 M. & W. 77 466 



XXVI. 



CASES CITED. 



XXXI 



Name of Case. Where Reported. Page. 

Wyatt v. Attorney-General of Quebec . [1911] A.C. 489 458, 465 

Wylson v. Dunn 34 Ch.D. 569 626 

Y. 

Yeap Cheah Neo v. Ong Cheng Neo. . L.R. 6 P.C. 381 105, 108, 110 

Yeates v. Reed 4 Blackf. (Ind.) 463, 465 159 

Yorkshire Woolcombers Association 

Limited, In re [1903] 2 Ch. 284 649 

Young y. Travellers Insurance Co. ... 80 Me. 244 11 



REPORTS OF CASES 



DETERMINED IN THE 

COURT OF APPEAL 

AND IN 1HE 

HIGH COURT OF JUSTICE FOR ONTARIO. 



[DIVISIONAL COURT.] 

McMulkin v. Traders Bank of Canada. 

Attachment of Debts — Money Deposited in Bank at Branch out of On- 
tario — Residence of Garnishees — Service of Attaching Order — Locality 
of Debt — Subrogation of Judgment Creditor to Rights of Debtor — • 
Con. Rules 162, 911 et seq. — Extra-territorial Recognition of Judgment 
—Residence of Debtor. 



D. C. 
1912 

March 2. 



Under Con. Rules 911 et seq., a debt may be attached to answer a judg- 
ment, (a) if the garnishee is within Ontario, or (6) if the garnishee is 
out of Ontario, and the case would fall within one or more of the clauses 
of Con. Rule 162 (as to service of original process out of Ontario) if 
the judgment debtor was himself seeking to assert his rights within 
Ontario. 

The money attached was deposited by the debtor in a branch in the Prov- 
ince of Alberta of a bank having its head office in Ontario. The attach- 
ing order was served on the bank at the head office, and reached the 
branch in Alberta before any demand by the debtor: — 

Held, that the order should be made absolute. 

The King v. Lovitt, [1912] A.C. 212, distinguished upon the ground that 
the Rules as to attachment of debts are not based upon the locality of 
the debts. 

The question whether the judgment of an Ontario Court would be accord- 
ed recognition in a foreign country is not one to be considered by the 
'Court. 

Judgment of Finkle, Co. C.J., Oxford, upon the trial of a garnishee issue, 
reversed. 



An appeal by the plaintiff (judgment creditor) from the 
judgment of Finkle, Co. C.J., Oxford, upon the trial of a garnishee 
issue. 

The following statement is taken from the judgment of Mid- 
dleton, J. : — 



2 


ONTARIO LAW REPORTS. [vol. 


D, C. 
1912 


The facts are not in dispute. On the 8th August, 1911, the 
plaintiff recovered a judgment against one Couldridge for $211.33. 


McMulkin 

V . 

Traders 
Bank 
of Canada 


On the 17th August, 1911, the plaintiff obtained a garnishee order 
nisi, attaching any debt due from the Traders Bank of Canada, 
the defendants in the issue, to the judgment debtor. This 
order was served on the manager of the Traders Bank of Canada 
at Ingersoll, on the 17th August, and upon the manager at the 
head office at Toronto, on the 18th August. 

An issue was directed between the attaching creditor and the 
garnishees for the purpose of determining whether, at the time of 
the service of the said order, there was any amount owing from the 
garnishees to the judgment debtor, and whether the garnishee 
order “was a valid attachment of such debt.” 

At the trial the learned Judge found against the attaching 
creditor, no /reasons being assigned. 

It appeared that, at the time of the recovery of judgment, 
the judgment debtor had $3,415 upon deposit in the branch of 
the Traders Bank of Canada at Ingersoll. This sum was with- 
drawn, and on the 9th August was deposited with the branch 
of the bank at Calgary. When the attaching order was served, 
it was accompanied by a notice addressed to the bank, warning 
the bank that the money sought to be attached was upon deposit 
with the Calgary branch. The general manager forwarded the 
attaching order to Calgary. It reached the Calgary office before 
banking hours on the 24th. Notwithstanding this, the bank 
permitted the withdrawal of the whole $3,415, and it was upon the 
same day redeposited by the judgment debtor to his own credit 
“in trust;” and, later on in the same day, the money so deposited 
was again withdrawn. 

February 22. The appeal was heard by a Divisional Court 
composed of Falconbridge, C.J.K.B., Teetzel and Middleton, 
JJ. 

J. B. Clarke, K.C., for the appellant. The question is, whether 
the order binds the branch of the bank in Alberta. I submit that 
it does. The bank, not the branch, is the debtor. 

The branch is merely an agent of the bank for 

certain purposes. The bank is subject to the jurisdic- 

tion of the Courts here. I refer to Tytler v. Canadian 
Pacific R.W. Co. (1898), 29 O.R. 654; Ferguson v. Carman (1866), 



XXVI.] 



ONTARIO LAW REPORTS. 



3 



26 U.C.R. 26; Prince v. Oriental Bank Corporation (1878), 3 App. 
Cas. 325; The King v. Lovitt, [1912] A.C. 212. The test is, not 
the situs of the debt; but, could the debtor sue in Ontario to 
recover the debt due him by the garnishees? See Con. Rule 911.* 
R. McKay, K.C., for the respondents. This money was not 
a debt in Ontario which could be ordered by the Ontario Courts 
to be paid over. The Traders Bank of Canada is a corporation 
having its head office in the Province of Ontario, but it is domiciled 
in every Province where it has offices. A judgment from this 
Court would not have the required effect in the Province of Alberta. 
It is the situs of the debt that governs. In order that the Ontario 
garnishment process may apply, the debt must be present here 
in Ontario. I refer to Deacon v. Chadwick (1901), 1 O.L.R. 346; 
Vezina v. Will H. Newsome Co. (1907), 14 O.L.R. 658; Brennan v. 
Cameron (1910), 1 O.W.N. 430; Pavey v. Davidson (1896), 23 
A.R. 9; S.C., sub nom. Purdom v. Pavey & Co. (1896), 26 S.C.R. 
412; In re Maudslay Sons & Field, Maudslay v. Maudslay Sons & 



D. C. 
1912 

McMulkin 

V. 

Traders 
Bank 
of Canada 



*911.(1) The Court or a Judge, upon the ex parte application of the 
judgment creditor, either before or after the oral examination mentioned 
in Rules 900 to 904 and 910, and upon affidavit by him or his solicitor, or 
some other person aware of the facts, stating that judgment has been re- 
covered, that it is still unsatisfied, and to what amount, and that some 
third person is indebted to the judgment debtor, and is within Ontario, 
may order that all debts owing or accruing from the third person (here- 
inafter called the garnishee) to the judgment debtor, shall be attached 
to answer the judgment debt; and by the same or any subsequent order 
it may be ordered that the garnishee appear before the Court or a Judge 
or before such officer as the Court or Judge shall appoint, to shew cause 
why he should not pay the judgment creditor the debt due from the gar- 
nishee to the judgment debtor, or so much thereof as may be sufficient to 
satisfy the judgment debt. 



(2) Upon a like application where the garnishee is not within Ontario, 
and upon its being made to appear on affidavit that the garnishee is so 
indebted to the judgment debtor and that the debt to be garnished is one 
for which the garnishee might be sued within Ontario by the judgment 
debtor, an order may be made that such, debt shall be attached to answer 
the judgment debt; and, by the same or any subsequent order, leave may 
be given to serve upon the garnishee, or in such manner as may seem 
proper, a notice (which may be embodied in the order), calling upon the 
garnishee to appear before the Court or a Judge or before such officer 
as the Court or Judge may appoint, to shew cause why he should not pay 
the judgment creditor the debt due from the garnishee to the judgment 
debtor, or so much thereof as may be sufficient to satisfy the judgment 
debt. 

(3) The order allowing the notice so to be given shall limit a time 
when the motion is to be heard, having regard to the place or country 
where or within which the notice is to be served. 

(4) Where the garnishee is not within Ontario and is neither a British 
subject nor in British dominions, notice of the order according to form 
No. 126, and not the order itself shall be served. 



4 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

McMulkin 

v. 

Traders 
Bank 
of Canada 



Field, [1900] 1 Ch. 602; Attorney-General for Ontario v. Woodruff 
(1907), 15 O.L.R. 416, [1908] A.C. 508; Parker v. Odette (1894), 
16 P.R. 69, Con. Rule 911. 

Clarke, in reply. 

March 2. The judgment of the Court was delivered by Middle- 
ton, J. (after setting out the facts as above) : — There is no doubt 
that, at the time of the service of the garnishee order, the garnishees 
were indebted to the judgment debtor. The only question is, 
whether this indebtedness was subject to attachment at the in- 
stance of the judgment creditor in the Ontario Courts. This 
falls to be determined on Con. Rules 911 et seq. These Rules were 
validated by 58 Viet. ch. 13, sec. 42, and 59 Viet. ch. 18, sec. 15. 
No notice has been served, as required by sec. 60 of the Judicature 
Act, if it is intended to contend that this legislation is ultra vires 
of Ontario. 



By the Rules in question, it is plain that the intention was to 
make exigible to answer a judgment recovered in Ontario: (a) 
any indebtedness to the judgment debtor where the garnishee 
was within Ontario; or ( b ) where the garnishee was not within 
Ontario, but the case would fall within the provisions of Con. 
Rule 162 if the judgment debtor was himself seeking to assert his 
rights within Ontario. The Rule does not proceed upon any 
theory as to the situs of the cause of action to be taken in execu- 
tion, but proceeds upon the theory that the creditor has a right to 
be subrogated to the position of his debtor, and to assert, for the 
purpose of enabling him to obtain satisfaction of the judgment, 
any right which the debtor himself could assert. If the garnishee 
is within Ontario and can be served within Ontario, the judgment 
creditor is given the right to collect any debt due by him to the 
judgment debtor. If the garnishee is not within Ontario and 
cannot be served within Ontario, then a debt cannot be collected 
under this process unless it falls within the classes enumerated 
in Con. Rule 162. 

This narrows the question for determination to an inquiry 
whether the debtor could himself sue in Ontario to recover the 
debt due him by the garnishees. 



XXVI. ] 



ONTARIO LAW REPORTS. 



5 



Before the decision of the Privy Council in The King v. Lovitt, 
[1912] A.C. 212, no one would have doubted this right. The 
question in that case was not one between the bank and its 
customer. What was there discussed was the right of New 
Brunswick to claim succession duty with respect to moneys on 
deposit in the St. John branch of the Bank of British North America. 
The head office of the bank was in London, England; the domicile 
of the testator was Nova Scotia. The right of the Province to 
tax was said to be limited to assets within the Province. It was 
argued that the situs of this simple contract debt was either at 
the residence of the debtor — i.e ., where its head office was, in 
London, England — or the domicile of the creditor, i.e., Nova 
Scotia. The Province claimed that the debt was a debt payable 
at St. John, and that it was primarily recoverable at St. John; 
the contract, properly understood, being a contract to be imple- 
mented at the branch of the bank in St. John. The Privy Council 
agreed with this, and thought that the locality of the debt was in 
truth fixed by the agreement between the parties, and that branch 
banks, although agencies of the bank itself, for certain purposes, 
may be regarded as distinct trading bodies. 

Had our Rules been based upon the locality of the debt to 
be taken in execution, this judgment would be conclusive against 
the attaching creditor; but, if I am right in thinking that this 
is not the test, then the decision has no application. The sole 
test given by our Rules is the ability to serve within Ontario, or 
the ability to bring the case within Con. Rule 162 if service cannot 
be made within Ontario. Had the contract been made between 
two residents of Calgary, and had the promise been to pay at 
Calgary and nowhere else, so that the parties had given as definite 
and complete a locality to the debt as is possible in the case of 
simple contract debts, and had the debtor thereafter moved 
within Ontario, then the debt would none the less be liable to 
attachment under our Rule, which merely requires the existence 
of a debt and presence of the debtor within Ontario. The debtor 
would not be exempt from suit at the instance of his original cred- 
itor if found and served within Ontario, because the Courts of 
Ontario have universal jurisdiction in all personal actions, subject 
only to their ability to effect service within their own jurisdiction: 
Tytler v. Canadian Pacific R.W. Co., 29 O.R. 654. 



D. C. 
1912 

McMulkin 

v. 

Traders 
Bank 
of Canada 

Middleton, J. 



6 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

McMulkin 

v. 

Traders 
Bank 
of Canada 

Middleton, J. 



Upon the argument, much was made of the difficulty that 
might in some cases arise if the Courts of Ontario were to assume 
authority to take in execution a debt of this kind, because, it was 
suggested, foreign Courts might not accord to the judgment of 
the Ontario Court any extra-territorial recognition. It is a suf- 
ficient answer to this to point out that this is a question of policy, 
affecting those who make the law, and that it cannot be considered 
by the Courts, who are called upon to administer the law as they 
find it: Western National Bank of City of New York v. Perez 

Triana & Co., [1891] 1 Q.B. 304. 

But it is not likely that in this case any such question can 
arise, because, at the time of the original suit, the judgment 
debtor was resident within Ontario, and he appears to be still 
here, as he was served with a notice of this appeal at Ingersoll. 

The appeal should be allowed, and the garnishees should be 
directed to pay to the judgment creditor sufficient to satisfy the 
judgment debt and the costs of the attachment proceedings, of 
the issue, and of this appeal. 



[DIVISIONAL COURT.] 

D - c - Fremont v. Fremont. 

1912 

Husband and Wife — Alimony — Separation Deed — Payment of Gross Sum — 

March 4 Absence of Provision for Maintenance of Wife. 

By the terms of a separation deed, husband and wife agreed to live apart,, 
and each agreed not to take any proceedings against the other for resti- 
tution of conjugal rights and not to annoy or interfere with the other 
in any manner whatsoever; the husband agreed to pay the wife $250; 
the wife agreed to pay her own debts, save three named accounts, and to 
support the two children. No provision was made in the deed for the 
maintenance of the wife; she did not covenant not to claim alimony; 
nor did she covenant to maintain herself: — 

Held, that the sum of $250 could not be regarded as intended for the 
maintenance of the wife: it was not so stipulated in the deed; and, 
apart from the fact that the sum was inadequate for that purpose, it 
might have been a payment made to induce the wife to assume care of 
the children. 

Atwood v. Atwood (1893-4), 15 P.R. 425, 16 P.R. 50, considered. 

Held, also, that the agreement to live apart did not relieve the husband 
from his obligation to maintain his wife; and, no provision having been 
made for her separate maintenance, she was entitled to alimony. 
Judgment of Clute, J., affirmed. 

Appeal by the plaintiff from the judgment of Clute, J., 
at the trial, on the 13th December, 1911, awarding the plaintiff 
alimony. 



XXVI.] 



ONTARIO LAW REPORTS. 



7 



The marriage took place on the 16th May, 1904. The parties D * c - 

cohabited until the 16th November, 1906, upon which day a 

separation agreement was entered into, since when the plaintiff Fremont 

V. 

had been maintaining herself and her two children. Fremont 

The trial Judge found, upon conflicting evidence, that the 
plaintiff was justified in leaving her husband by reason of his 
cruelty and misconduct. 

February 23. The appeal was heard by a Divisional Court 
composed of Falconbridge, C.J.K.B., Teetzel and Middleton, 

JJ. 

G. H. Watson, K.C., for the defendant, argued that the sepa- 
ration agreement entered into between the plaintiff and the de- 
fendant was a complete bar to the action: Bishop v. Bishop, 

[1897] P. 138, at p. 149; Clark v. Clark (1885), 10 P.D. 188; 

Barry v. Barry, [1901] P. 87. The payment of the $250 by the 
husband to the wife freed the husband from any obligation for 
maintenance; and the adequacy or inadequacy of this sum made 
no difference: Eastland v. Burchell (1878), 3 Q.B.D. 432; Biffin 
v. Bignell (1862), 7 Ex. 877. The wife’s maintenance having been 
provided for, she cannot sue, any more than could a creditor 
for necessaries supplied to her, she having no authority to pledge 
his credit. Counsel referred to McGregor v. McGregor (1888), 

21 Q.B.D. 424; Hart v. Hart (1881), 18 Ch.D. 670; Atwood v. 

Atwood (1893-4), 15 P.R. 425, 16 P.R. 50; Lush on Husband 
and Wife, 3rd ed, p. 417 et seq., p. 487 et seq.; Wood v. Wood 
(1887), 57 L.J.N.S. Ch. 1. 

R. McKay, K.C., for the plaintiff, cited Laf ranee v. Lafrance 
(1898), 18 P.R. 62, and Beatty v. Beatty (1909), 1 O.W.N. 243. 

Watson, in reply. 

March 4. The judgment of the Court was delivered by 
Middleton, J.: — The sole question argued before us was as to 
whether the provisions of the separation deed preclude the action. 

By the terms of this deed, the parties agree to live separate 
from each other, and each agrees not to take any proceedings 
against the other for restitution of conjugal rights or to annoy 
or interfere with the other in any manner whatsoever. The 
husband agrees to pay the wife $250 — $50 in cash and the balance 
secured by forty promissory notes for $5 each, payable monthly. 



8 

D. C. 
1912 

Fremont 

v. 

Fremont 

Middleton, J. 



ONTARIO LAW REPORTS. [vol. 

The wife agrees to pay her own debts, save three named accounts, 
and to support the two children. 

It is to be observed that there is no provision in this deed 
relating to the maintenance of the wife. She does not covenant 
not to claim alimony from her husband, nor does she covenant to 
maintain herself. The learned trial Judge has taken the view 
that the mere agreement to live separately does not relieve the 
husband from his obligation to support and maintain his wife. 
With this we agree. 

A husband, by the act of marriage, undertakes to maintain 
and keep his wife, unless she commits adultery; and, when she 
is living apart from him under circumstances which justify the 
separation, he is bound to maintain her, unless she has expressly 
renounced her rights, or she has such means of her own as make 
it unnecessary for him to maintain her. If the husband fails 
to maintain her, she has what has been called “authority of 
necessity” to pledge her husband’s credit. Mr. Watson is 
probably right when he takes the position that the same test 
can be applied to determine the wife’s right to alimony as in the 
case of an action brought against the husband by one who has 
supplied his wife with necessaries; the creditor in the latter 
case deriving his claim entirely from the wife’s implied authority. 

The earlier cases made the adequacy of the provision of the 
husband for his wife’s maintenance the test of the limit of her 
authority. The later cases have departed from this rule; and 
unless the wife is entitled to relief by reason of fraud or duress, 
she is now regarded as able to make her own terms, and to agree 
to accept a stipulated allowance as being adequate for her main- 
tenance. 

In this case there is no provision whatever for maintenance, 
and there has been no release by the wife of her right to be main- 
tained. The wife is entitled to be separately maintained, not 
merely because the husband has agreed to her living apart, but 
also because the misconduct found by the Judge justifies a sepa- 
ration. 

The case falls within the words of Lush, J., in Eastland v. 
Burchett, 3 Q.B.D. 432, at pp. 435, 436: “If he wrongfully com- 
pels her to leave his home, he is bound to maintain her elsewhere, 
and if he makes no adequate provision for this purpose, she be- 



XXVI. ] 



ONTARIO LAW REPORTS. 



9 



comes an agent of necessity to supply her wants upon his credit. 
In such a case, inasmuch as she is entitled to a provision suitable 
to her husband’s means and position, the sufficiency of any allow- 
ance which he makes under these circumstances, is necessarily 
a question for the jury. Where, however, the parties separate 
by mutual consent, they may make their own terms; and so 
long as they continue the separation, these terms are binding on 
both.” 

Here the parties have not made their own terms for the sepa- 
rate maintenance of the wife. The husband has made no ade- 
quate provision for her, and she is justified in resorting to the 
Court for an alimentary allowance. 

This case differs from any reported decision; as in all the 
reported cases where there was separation, either voluntary or 
on account of the husband’s misconduct, the separation deed did 
contain an alimentary provision. It is impossible to regard the 
lump sum of $250 as being intended for the maintenance of the 
wife. The deed does not so stipulate; and, apart from the fact 
that that sum is clearly inadequate for this purpose, it may have 
been a payment made to induce the wife to assume care of the 
children. 

In Atwood v. Atwood, 15 P.R. 425, the Chancellor says: “A 
separation deed may be well upheld by the payment of a sum 
in gross, and a provision to arise de anno in annum is not essen- 
tial.” (See also the same case in appeal, 16 P.R. 50.) 

No authority is referred to, and I can find no case in which 
such a provision was made. A lump sum so paid, enough to 
produce an adequate income or to supplement the wife’s own in- 
come, might well be sufficient; but a sum such as that paid 
here would be so grossly inadequate as to afford in itself conclu- 
sive evidence either of duress or improvidence. 

In this case it is sufficient to say that upon the deed itself 
the sum is not accepted in lieu of alimony. 

The appeal should be dismissed with costs. 



D.C, 

1912 

Fremont 

v. 

Fremont 

Middleton, J. 



10 



ONTARIO LAW REPORTS. 



[VOL. 



[IN THE COURT OF APPEAL.] 

Wallace v. Employers’ Liability Assurance Corporation. 

Accident Insurance — Temporary Total Disability — Double Indemnity — 
“Riding as a Passenger” — Injury to Assured on Highway after Alight- 
ing from Street Car. 

The judgment of Meredith, C.J.C.P., 25 O.L.R. 80, upon the facts there 
stated, was affirmed as to total disability and reversed as to double 
indemnity — it being held, that the plaintiff was not “riding as a passen- 
ger” upon the street car from which he had alighted when he received 
the injuries upon which his claim to the double indemnity was based. 

Appeal by the defendants from the judgment of Meredith, 
C.J.C.P., 25 O.L.R. 80, in an action upon an accident insurance 
policy, in favour of the plaintiff’s claim for temporary total 
disability and his further claim for double indemnity, upon the 
ground that, when he sustained the accident in respect of which 
he claimed, he was “riding as a passenger” upon a public con- 
veyance. 

January 23. The appeal was heard by Moss, C.J.O., Garrow, 
Maclaren, Meredith, and Magee, JJ.A. 

N. W. Rowell, K.C., for the defendants, argued that the 
plaintiff was not “riding as a passenger” when the accident 
occurred. He had alighted, and was merely entitled to the rights 
of a person on the public highway. The word “passenger” 
implies an intention to travel, while the plaintiff was at his 
journey’s end, and was on property not controlled by the railway 
company: Booth’s Street Railway Law (1892), sec. 326; see note 
on p. 445 and case of Creamer v. West End St. R.W. Co. (1892), 
31 N.E. Repr. 391, there cited; also Platt v. Forty-Second St. and 
Grand St. Ferry R.R. Co. (1874), 2 Hun (N.Y.) 124. On the 
question of intention, he referred to Am. & Eng. Encyc. of Law, 2nd 
ed., vol. 1, p. 305, and cases there cited, especially Hendrick v. Em- 
ployers’ Liability Assurance Corporation (1894), 62 Fed. Repr. 893. 
He referred particularly to the case of Anable v. Fidelity and 
Casualty Co. of N.Y. (1906), 63 Atl. Repr. 92, affirmed (1907), 
74 N.J.L. 686. He also referred to JZtna Life Insurance Co. v. 
Vandecar (1898), 86 Fed. Repr. 282. On the other point in the 
case, the evidence, while somewhat conflicting, shewed that the 
plaintiff was not wholly disabled by the accident, as he assisted 
his wife in looking after the heating of the premises of which 



C. A. 
1912 

March 6 



XXVI.] 



ONTARIO LAW REPORTS. 



11 



they jointly had a lease, and in the buying of necessary stores, 
so that he was not entitled to the benefits under the policy arising 
from total disability: Am. & Eng. Encyc. of Law, 2nd ed., vol. 1, 
p. 336, and cases there cited. 

D. Urquhart, for the plaintiff, argued that there was ample 
evidence to support the finding of the learned trial Judge that the 
plaintiff’s injury wholly incapacitated him from business: Young 
v. Travelers Insurance Co. (1888), 80 Me. 244; Hooper v. Acci- 
dental Death Insurance Co. (1860), 5 H. & N. 546. On the other 
point, reference was made to Theobald v. Railway Passengers 
Assurance Corporation (1854), 10 Ex. 45, as the earliest case on 
the subject. That case was followed in Powis v. Ontario Accident 
Insurance Co. (1901), 1 O.L.R. 54, and shews that a passenger 
remains a passenger until he has safely landed at his destination. 
The plaintiff could not be said to have alighted safely from the 
car until he had got a foot-hold upon the street which he could 
maintain. Reference was made to the following cases and authori- 
ties: Nellis on Street Railways, 2nd ed., secs. 260,261; Northrup 
v. Railway Passenger Assurance Co. (1871), 43 N.Y. 516; May on 
Insurance, 4th ed., secs. 521, 524-529 (inch); Tooley v. Railway 
Passenger Assurance Co. (1873), 2 Ins. L.J. 275. 



C. A. 
1912 

Wallace 

v. 

Employers’ 

Liability 

Assurance 

Corpora- 

tion 



Rowell, in reply, argued that the cases cited on behalf of the 
respondent were not applicable, and that the Anable case covered 
the whole ground. 

i 

March 6. Maclaren, J.A. : — This is an appeal by the de- 
fendants from a judgment of Meredith, C.J., without a jury, 
awarding the plaintiff $1,300 for 26 weeks’ total disability from 
injuries received after alighting from a street car in Toronto. 
The defendants had issued a policy in the plaintiff’s favour, 
insuring him against injuries for $25 a week for “ temporary 
total disability;” the amount to be $50 a week if the injuries 
were sustained “ while riding as a passenger in or upon a public 
conveyance.” 

The claim was resisted on the ground that the plaintiff’s 
illness and disability were caused not by the alleged injury, but 
were due to locomotor ataxia or an aneurism. The trial Judge 
found for the plaintiff on this issue; and, although urged in the 
reasons for appeal, it was abandoned in the argument before us. 



12 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Wallace 

v. 

Employers’ 

Liability 

Assurance 

Corpora- 

tion 

Maclaren, J.A. 



Another ground of defence was, that the plaintiff was a com- 
mercial traveller, but before the accident in question he had ceased 
to be such, and had become the keeper of a boarding-house, and 
had followed this business during the period claimed for. “ Tem- 
porary total disability’ ’ is defined in the policy as arising from 
injuries resulting in the “ assured being immediately, continuously, 
and wholly disabled, and thereby prevented from transacting 
any and every kind of business pertaining to his occupation.” 
The trial Judge found as a fact that the boarding-house business 
was his wife’s, and not his; and that the trifling assistance he 
gave her was not sufficient to affect his claim. This finding 
seems to be amply justified by the evidence, and the appeal on 
this ground should be dismissed. 

The third ground of appeal is more serious. It is contended 
by the defence that, even if the plaintiff were entitled to $25 a 
week, he is not entitled to $50 a week, or the double allowance, 
as his injuries were not sustained while he was “ riding as a pas- 
senger in or upon a public conveyance.” 

The word “ passenger” had been variously defined, and it 
is difficult to frame a definition that would be of general applica- 
tion. It usually means one who travels or is carried in a vessel, 
coach, railway or street car, or other public conveyance, entered 
by fare or contract express or implied. The precise time at which 
the traveller becomes a passenger or ceases to be such depends 
upon the facts of the particular case. If the carrier owns or con- 
trols the station, platform, or other premises where the journey 
begins or terminates, the relation of carrier and passenger may 
begin sooner and terminate later than in the case of a tram or 
street car, where the carrier has no control over the place of de- 
parture or arrival. In the present case we have not to determine 
whether the plaintiff had ceased to be a passenger with reference 
to the Toronto Railway Company when he received the injury 
complained of, but whether at that time he was “ riding as a pas- 
senger in or upon a public conveyance.” 



The facts of the case as given by the plaintiff in his evidence 
are quite simple. He was a passenger on an open street car in 
the city of Toronto, which stopped to let him off at the regular 
stopping place, just opposite his home. When he stepped on the 
ground, an automobile going in the same direction was about 



XXVI.] 



ONTARIO LAW REPORTS. 



13 



to run him down, and to save himself he tried to get on the street 
car again, which by this time was in motion. He says he reached 
out to catch hold of the handle of the car, and was jerked around, 
and fell between the car and automobile, his head striking the 
side of the car as he fell. 

We were not referred to any Canadian or English case precisely 
in point; but there are a number of American cases that are 
very similar to the present one. 

In Creamer v. West End St. R.W. Co. (1892), 156 Mass. 320, 
a passenger had taken one or two steps from where he touched the 
ground on leaving his car and was struck by another car. The 
Court said: “We are of opinion that he was not a passenger 
when the accident occurred, and, that he ceased to be a passenger 
when he alighted upon the street from his car. The street is in 
no sense a passenger station, for the safety of which a street railway 
company is responsible. When a passenger steps from the car 
upon the street, he becomes a traveller upon the highway, and 
terminates his relations and rights as a passenger, and the railway 
company is not responsible to him as a carrier for the condition 
of the street, or for his safe passage from the car to the sidewalk.” 

In Platt v. Forty-Second St. and Grand St. Ferry R.R. Co., 2 Hun 
(N.Y.) 124, the plaintiff had left the company’s car and was pass- 
ing the horses which had been drawing it, when one of them 
injured her. It was held that she had ceased to be a passenger 
on tfee car, and that the liability of the company, if any, was not 
that of a common carrier, but depended upon the principles 
that apply to all persons lawfully using the highway. 



C. A. 
1912 

Wallace 

v. 

Employers ’ 
Liability 
Assurance 
Corpora- 
tion 

Maclaren, J.A. 



Anable v. Fidelity and Casualty Co. of N.Y., 73 N.J.L. 320 
(1906), was an action on a policy in the same terms as the one in 
this case — providing for double indemnity for an injury “while 
riding as a passenger in or upon a public conveyance.” While 
the train was at a station, the assured stepped on the 
station platform to buy a paper. The train started, and the as- 
sured grasped the handrail of one of the cars, but fell, and the last 
car passed over his body, killing him instantly. The trial Judge 
held that the rights of the parties must be ascertained by the 
plain natural meaning of the language used; that he was not in a 
car nor on a car, nor on any part of a train at the time of the injury; 
that he was insured not simply as a passenger, but was entitled 



14 

C.A. 

1912 

Wallace 

v. 

Employers’ 

Liability 

Assurance 

Corpora- 

tion 

Maclaren, J.A. 



ONTARIO LAW REPORTS. [vol. 

to the double indemnity only if the injury was received while within 
or on the car or other public conveyance, which was considered a 
less hazardous risk than while in the act of getting on or off, 
which might involve a considerable degree of peril. This judg- 
ment was affirmed and approved unanimously by the appellate 
Court of eleven Judges: 74 N.J.L. 686 (1907). 

The reasoning in this last case commends itself to my judgment. 
In the present case the plaintiff was not in fact either in or on the 
car when he received the injury. If he had been, he would not 
have been injured. It is common knowledge that the vast 
majority of street car accidents to passengers occur in connection 
with entering or leaving the car, injuries to those in or on the cars 
being limited to the rarer cases of collisions or the car running 
off the track. I do not think that the language of the policy 
should be strained so as to cover a risk which does not come within 
its terms; and a risk for which the proper premium was not paid. 

I am further of opinion that the plaintiff was not even a “ pas- 
senger/’ within the meaning of the policy, at the time he received 
the injury. He had fully completed the journey for which he 
had entered the car and paid his fare. The car had stopped at 
his request at the very spot at which he desired to alight, and with 
which he was very familiar, as it was almost at his own door. 
He had completely separated himself from the car and was se- 
curely landed on the roadway. His subsequent attempt to lay 
hold of the car and get upon its steps was not for the purpose of 
resuming his journey or again becoming a passenger on the car, 
and was in no way connected with his having been a passenger 
a short time previously. His position was the same as that of 
any foot-passenger on the street who might find himself in the 
same peril, and might try to take refuge from the deadly auto- 
mobile. But I do not think it is necessary to decide whether, 
at the time of the accident, he was a passenger or not; it is suffi- 
cient that he was not then “ riding as a passenger in or upon a 
public conveyance.” 

In my opinion, the plaintiff is entitled only to single and 
not to double indemnity, and the $1,300 awarded him should 
be reduced to $650. 

There should be no costs of the appeal. 



XXVI.] 



ONTARIO LAW REPORTS. 



15 



Meredith, J.A. : — The first question is, whether the plaintiff, 
at the time of his injury, was ‘'riding as a passenger in or upon” 
the street car; and is not the broader one whether, at that time, 
he might be considered merely a passenger as against the railway 
company. 

He had been a passenger riding in and upon the street car, 
but had reached his destination, the car had been stopped to let 
him down, and he had alighted upon the public road, severing 
entirely all actual connection between himself and it; but, being 
put in imminent danger by a rapidly approaching motor car, 
he caught at the street car again, though it had by that time been 
started again and was in motion; and, in endeavouring to escape 
injury from the motor car by getting upon the street car, fell, or 
was thrown down, coming in contact with the moving cars, 
and so was severely injured. His purpose in trying to get upon 
the street car again was not to resume his journey; that was ended; 
nor was it to begin a new journey; it was solely to escape injury 
by the negligently-driven motor car. It is idle to say that there 
was negligence on the part of the railway company, if that would 
make any difference; how could their servants foresee and be 
blameable for the misconduct of the driver of the motor car? It 
was at the plaintiff’s instance, and upon his signal, that the street 
car was stopped at this alighting place; an entirely proper place 
to stop for that purpose; the danger was something not foreseen 
by the plaintiff or any one else, because doubtless not apparent 
until the motor car was almost upon him; avoidable, with any 
sort of care on the part of its driver, up to almost the last moment. 

Under these circumstances, it is impossible for me to find 
that the man was “riding in or upon” the street car when he was 
injured; if he had been in or upon the street car, he would not 
have been injured as he was. The case would have been different 
if he had, after alighting, boarded the car again with the intention 
of resuming his journey, or of beginning a new one; but nothing 
like that was the case. Their plain meaning ought to be given 
to plain words, even though the result be different from that 
which one would prefer. And such is the effect of the cases in 
the Courts of the State of New Jersey, which, though very much 
in point, were not referred to at the trial. 

The case, therefore, is not one for “double indemnity” under 



C. A. 
1912 

Wallace 

v. 

Employers ’ 
Liability 
Assurance 
Corpora- 
tion 

Meredith, J.A. 



16 


ONTARIO LAW REPORTS. [vol. 


C. A. 
1912 


the policy in question, but for single indemnity; and the amount 
of the judgment entered for the plaintiff ought to be reduced 


Wallace 

V . 

Employers ’ 
Liability 
Assurance 
Corpora- 
tion 


accordingly. 

The appeal upon the other ground fails entirely; there is 
ample evidence to support the finding that the plaintiff’s injury 
caused him “ temporary total disability,” within the meaning of 
those words contained in the policy. 


Meredith, J.A. 


Moss, C.J.O., Garrow and Magee, JJ.A., concurred. 

Appeal allowed in part. 





[IN THE COURT OF APPEAL.] 


C.A. 

1912 


Rex v. Sovereen. 


March 6 


Criminal Law — Keeping Disorderly House — Indictment at Sessions — Con- 
viction — Evidence to Sustain — Judge's Charge — Reference to Convic- 
tion of Previous Occupant — Right of Prisoner, after Indictment 
Found, to Elect Trial without Jury — Criminal Code, secs. 2:25, 228, 
825, 873 — Re-election — Notice to Sheriff. 

The defendant was indicted at the Sessions for keeping a disorderly house, 
that is to say, a common bawdy house, contrary to secs. .228 and 225 
of the Criminal Code, and was tried by a jury and found guilty. Upon 
a case reserved by the Chairman of the Sessions: — 

Held, that there was valid evidence that the defendant was the keeper of 
a disorderly house; and that a reference, in the Chairman’s charge to 
the jury, to a woman who had been previously convicted, was not 
erroneous. 

2. The defendant had been committed for trial by a magistrate, but the 
indictment on which he was convicted was not preferred by the person 
(if any) bound over to prosecute, but by the County Crown Attorney, 
with the written consent of the trial Judge, under sec. 873 of the Code. 
After a true bill had been found by the grand jury, and before arraign- 
ment or plea, the defendant asked to be allowed to elect to be tried 
by the County Court Judge without a jury under the Speedy Trials 
sections of the Code: — 

Held, that he was not entitled so to elect. 

Per Moss, C.J.O.: — Where a person committed for trial, and whether in 
custody or upon bail, has not, before a bill of indictment has been 
found against him by a grand jury, taken the steps necessary to enable 
him to elect to be tried by a Judge without a jury, he is not, upon bill 
found and arraignment thereon, entitled as of right to ask to be allowed 
to elect to be tried without a jury. The right is given only in cases in 
which the exercise of such an election would or might effect a speedy 
trial of an accused person, and thereby save the delay which waiting for 
a trial by jury might involve. 



XXVI.] 



ONTARIO LAW REPORTS. 



17 



Per Maclaren, J.A. : — It must be assumed that the charge in the indict- 
ment was not the same as that upon which the defendant was committed, 
or as any other charge appearing in the evidence before the magis- 
trate, as, in either of these events, the County Crown Attorney would 
not, under sec. 871, have needed the consent of the Judge to prefer the 
indictment; and it is clear from sec. 825 et seq. of the Code that a 
speedy trial before a Judge can be had only upon a charge on which 
the magistrate has committed the accused, or upon one which appears in 
the evidence before him. But, even if the indictment had been based 
upon a charge for which the accused had been committed or which ap- 
peared in the depositions, he should have elected before the true bill 
was found by the grand jury. 

The King v. Komiensky (1903), 6 Can. Crim. Cas. 524, and The King 
v. Wener (1903), 76. 406, approved. 

Per Magee, J.A. : — Rex v. Thompson (1908), 17 Man. L.R. 508, approved. 
Per Maclaren and Magee, JJ.A. : — The defendant, not having given 
to the Sheriff the notice required by sub-sec. 6 of sec. 825 of the Code 
(as added by 8 & 9 Edw. VII. ch. 9), was not in a position to claim 
the right to re-elect. 

Case stated by the Chairman of the General Sessions of the 
Peace for the County of Norfolk. 

The accused, Wilbert Sovereen, was indicted at the Sessions 
in December, 1911, for that he on the 23rd July, 1911, and on 
other days and times before that date, did keep a disorderly house, 
that is to say, a common bawdy house, contrary to secs. 228 and 
225 of the Criminal Code, and was found guilty by the jury. 

The indictment was not preferred at the instance of the person 
bound over to prosecute, but by the County* Crown Attorney, 
with the written consent of the Chairman, under sec. 873 of the 
Criminal Code. After a true bill had been found by the grand 
jury, but before arraignment or plea, the prisoner desired to be 
allowed to elect to be tried before the County Court Judge without 
a jury, under the Speedy Trials sections of the Code. On its being 
held that he was not entitled so to elect, he pleaded “not guilty.” 

The Chairman, on the application of the prisoner’s counsel, 
reserved for the Court the following questions: — 

1. Was there any valid evidence that the prisoner was the 
keeper of a disorderly house? 

2. Was my charge erroneous as regards the reference made 
therein to the woman who had been previously convicted ? 

3. Was the prisoner, in the circumstances above stated, en- 
titled to make an election for speedy trial ? 

February 20. The case was heard by Moss, C.J.O., Garrow, 
Maclaren, and Magee, JJ.A., and Latchford, J. 

2 — XXVI. O.L.R. 



C. A. 
1912 

Rex 

v. 

Sovereen 



18 



ONTARIO LAW REPORTS. 



0. A. 
1912 

Rex 

v. 

SOVEREEN 



[vol. 



J. B. Mackenzie, for the prisoner, argued that the evidence 
as to the character of the house under the previous occupant was 
inadmissible; and that, as the law now stands, a person out on 
bail is entitled to elect to be tried by a Judge without a jury: 
Criminal Code, sec. 825, sub-secs. 6 and 7, added by 8 & 9 Edw. 
VII. ch. 9.* There is no reported case since the amendment 
of the Code by the statute of 8 & 9 Edw. VII. Reference 
was made to the following cases: Rex v. O’Gorman (1909), 18 
O.L.R. 427; The Queen v. Laurence (1896), 1 Can. Crim. Cas. 295; 
The King v. Komiensky (1903), 6 Can. Crim. Cas. 524; The King 
v. Wener (1903), 6 Can. Crim. Cas. 406; Regina v. St. Clair (1900), 
27 A.R. 308; Regina v. McNamara (1891), 20 O.R. 489. 

J. R. Cartwright, K.C., for the Crown, argued that the evidence 
was sufficient to support the conviction, and that the prisoner 
was not entitled to elect to be tried without a jury after a bill of 
indictment had been found against him. 

March 6. Moss, C.J.O. : — We are all agreed that the questions 
submitted by the learned Chairman of the General Sessions should 
be answered adversely to the contentions made on behalf of the 
prisoner. 

As to the first and second questions, having regard to the 
evidence and the charge to the jury, which are made part of the 
stated case, there can be no reasonable doubt. 

The third question affords more room for difference of opinion — 
not, however, as to what the proper conclusion should be, hut 
rather as to grounds upon which it should be based. 

Speaking for myself, and with the utmost respect for those 
who have indicated or expressed a different view, I think that 
where, as here, a person committed for trial, and whether in custody 
or upon bail, has not, before a bill of indictment has been found 
against him by a grand jury, taken the steps necessary to enable 

*6. A person accused of any offence within sub-section 1 of this sec- 
tion, who has been bound over by a Justice or Justices under the provisions 
of section 696 and is at large under bail, may notify the Sheriff that he 
desires to make his election under this Part, and thereupon the Sheriff 
shall notify the Judge, or the prosecuting officer, as provided in section 
826. 

7. In such case, the Judge having fixed the time when and the place 
where the accused shall make his election, the Sheriff shall notify the 
accused thereof, and the accused shall attend at the time and place so 
fixed, and the subsequent proceedings shall be the same as in other cases 
under this Part. 



XXVI.] 



ONTARIO LAW REPORTS. 



19 



him to elect to be tried by a Judge without a jury, he is not, upon 
bill found and arraignment thereon, entitled as of right to ask to be 
allowed to elect to be tried without a jury. If that is not the effect 
of the legislation, it places it in the power of the accused not merely 
to postpone his trial, but to render futile all that has been done 
by the grand jury, and necessitate a compliance with all the forms 
prescribed by sec. 827 of the Code, including the preparation and 
preferring by the prosecuting officer of a charge in accordance 
with the directions given in sec. 827 (3). 

I am unable to think that it was the intention to give an accused 
person the general right to elect to be tried without a jury. On 
the contrary, I think that the intention was to give it only in cases 
in which the exercise of such an election would or might effect a 
speedy trial of an accused person, and thereby save the delay 
which waiting for a trial by jury might involve. 

And I do not think the legislation extends the right beyond 
that point. 

I agree that the first question should be answered in the 
affirmative and the second and third in the negative, and that the 
conviction should stand. 

Maclaren, J.A. : — The accused in this case was tried at the 
General Sessions of the County of Norfolk before Robb, County 
Court Judge, and a jury, and was convicted of keeping a disorderly 
house. He had been committed for trial by a magistrate, but the 
indictment on which he was convicted was not preferred by the 
person bound over to prosecute, but by the County Crown At- 
torney, with the written consent of the trial Judge, under sec. 873 
of the Criminal Code. After a true bill had been found by the 
grand jury, and before arraignment or plea, the prisoner desired 
to elect to be tried before the County Court Judge without a 
jury, under the Speedy Trials Act (Part XVIII. of the Criminal 
Code). On its being held that he was not entitled so to elect, 
he pleaded “not guilty.” At the close of the trial, the Judge, 
on the application of the prisoner’s counsel, reserved for this 
Court the following questions: — 

1. Was there any valid evidence that the prisoner was the 
keeper of a disorderly house ? 

2. Was my charge erroneous as regards the reference made 
therein to the woman who had been previously convicted ? 



C. A. 
1912 

Rex 

v. 

SOVEREEN 
Moss, C.J.O. 



ONTARIO LAW REPORTS. [vol. 

3. Was the prisoner, in the circumstances above stated, 
entitled to make an election for speedy trial ? 

As to the first question, I am of opinion that there was ample 
evidence, if believed by the jury, to prove that the house in question 
was a disorderly house, and that he was the keeper. The house 
belonged to him and also the furniture, and he used it when working 
the farm with which it was connected, which was some two or 
three miles from his homestead. The evidence points strongly 
to his having been a joint occupant or keeper with the woman said 
to have been convicted in October, 1910, and to his being the sole 
keeper after that tiiiie, the house being occupied from time to 
time by disreputable women. The house retained the same 
character and reputation after October, 1910, as before; and the 
admissions made by the witness who did the chores about the 
house for the prisoner — and made very reluctantly — are quite 
sufficient alone to justify the conviction. This question should 
be answered in the affirmative. 

As to the second question, what the trial Judge said in his 
charge on the subject was this: “It has been suggested that the 
woman who has been already convicted was the keeper; but I 
think that we have nothing to do with that in this case. I think 
that, no matter whether she was convicted or not, you have got 
to try this case upon the evidence that has been presented before 
you; and, if you come to the conclusion that the prisoner is the 
keeper or was at any time the keeper of this house, you should 
find him guilty, giving him, of course, the benefit of any doubt 
that you may have.” I fail to see on what grounds the prisoner 
could properly complain of this charge. This question should, 
in my opinion, be answered in the negative. 

The third question should also, in my opinion, be answered 
in the negative. Part XVIII. of the Criminal Code (secs. 822 to 
842 inclusive), relating to “Speedy Trials of Indictable Offences,” 
has reference exclusively to prosecutions based upon an informa- 
tion or complaint and a preliminary examination before a magis- 
trate. It is true that there was in this case a preliminary examina- 
tion before a magistrate, and the prisoner was committed for 
trial. But this was not followed up by an indictment based 
upon the charge for which he was committed, “or for any charge 
founded upon the facts or evidence disclosed on the depositions 



XXVI.] 



ONTARIO LAW REPORTS. 



21 



f taken before the Justice/’ as might have been done under the 
provisions of sec. 871 of the Criminal Code. It does not appear 
from the reserved case whether or not the complainant before the 
magistrate was present at the Sessions; but, whether or not, the 
County Crown Attorney might prefer an indictment for the 
charge upon which the prisoner was committed or for any charge 
founded on the facts or evidence disclosed in the depositions: 
Criminal Code, sec. 872. The Deputy Attorney-General informed 
us at the argument that his instructions were, that no one was 
bound over to prosecute, although the reserved case would lead 
one to infer that some one had been so bound; but, in my opinion, 
in the circumstances of this case, this was quite immaterial. 

The fact is, that the depositions and the committal were 
both ignored, and were not followed by the person bound over to 
prosecute, if there was such a person, or by the County Crown 
Attorney. Instead of this, the County Crown Attorney, under 
sec. 873, obtained the written consent of the Judge to prefer the 
indictment set out in the reserved case, on which a true bill was 
returned by the grand jury, and on which the petty jury returned 
a verdict of “ guilty.” The depositions taken before the magis- 
trate were not made a part of the reserved case, and counsel for 
the prisoner did not, before us, ask or even suggest that they 
should be made a part of it. In the circumstances, we must, 
I think, assume that the charge in the indictment is not the same 
as that for which the prisoner was committed, or any other charge 
appearing in the evidence before the magistrate, as, in either of 
these events, the County Crown Attorney would not, under sec. 
871, have needed the consent of the Judge to prefer the indictment. 

It is quite clear from sec. 825 and the succeeding sections of 
the Code that a speedy trial before a Judge can be had only upon 
a charge on which the magistrate has committed the accused, 
or upon one which appears in the evidence before him. As said 
by Wurtele, J., in The King v. Wener, 6 Can. Crim. Cas. 406, at 
p. 413: “The Criminal Code does not prescribe that an accused 
can elect to be tried without a jury when, without a preliminary 
inquiry or without a committal or an admission to bail, and 
subsequent custody for trial, a bill of indictment has been preferred 
by the Attorney-General or by any one by his direction, or with 
the written consent of a Judge of a Court of criminal jurisdiction, 



C. A. 
1912 

Rex 

v. 

SOVEREEN 
Maclaren, J.A. 



22 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Rex 

v. 

SOVEREEN 
Maclaren, J.A. 



[VOL. 



or by order of such Court, and thus remove the prosecution from 
the forum to which it properly belongs to another to which juris- 
diction has not in such case been given by law. In the absence 
of any statutory provisions or statutory authority an accused 
has no right in such a case to demand and obtain a trial in any 
other Court than the one in which the indictment was found, 
and which has jurisdiction over the case, and is seized with it.” 

As stated above, the indictment in this case did not originate 
with and is not based upon a charge or depositions taken before 
a magistrate, but is based solely upon the written consent given 
by the trial Judge, and the Code does not provide for a trial before 
a Judge without a jury in such a case. 

. But, even if the indictment had been based upon a charge 
for which the accused had been committed or which appeared in 
the depositions, I am of opinion that he should have elected before 
the true bill was found by the grand jury. I agree with what is 
said by Wurtele, J., in the Wener case, at the page above cited. 
He there says: “If no election has been made before an indict- 
ment is returned founded on the facts or evidence disclosed by the 
depositions taken at the preliminary inquiry, the accused has no 
statutory right to demand a trial before a Judge of Sessions 
without a jury, and avoid a trial on the indictment.” In another 
case of The King v. Komiensky , in the same volume, at p. 528, 
the same Judge says: “On the finding of true bills, the Court is 
finally seized with the prosecution, and exclusive jurisdiction 
over them is vested in the Court, which is the only competent 
forum or tribunal to carry them in due course and in the ordinary 
way to their final stage of either conviction or acquittal by the 
petty jury.” On the other hand, in a Manitoba case, Rex v. 
Thompson (1908), 17 Man. L.R. 608, it was held by Howell, C.J.A., 
that a prisoner may elect up to the time of pleading. I can find 
nothing in the Code to justify this position, and, in my opinion, 
it is quite contrary to the genius and spirit of the Speedy Trials 
Act (now Part XVIII. of the Code). I am of opinion that the cor- 
rect doctrine is that laid down as above by Wurtele, J. To hold 
otherwise would be to defeat the very object and purpose of the 
legislation, and the title of “Speedy Trials” would become a 
veritable misnomer, and provisions that were designed and en- 



XXVI.] 



ONTARIO LAW REPORTS. 



23 



acted to speed trials would be converted into machinery to retard 
and delay. 

But there is also, in addition, another difficulty in the way of 
the prisoner. Having been bound over under sec. 696, and being 
under bail, if he desired to elect, he should have given the notice 
of such desire to the Sheriff, as required by sub-sec. 6, added to 
sec. 825 of the Code by the amending Act of 1909, 8 & 9 Edw. VII. 
ch. 9. This he did not do, so that he did not take the first step 
to secure such right. It may be said that this objection is a 
technical one. But, if the prisoner is claiming a privilege so much 
at variance with the spirit and object of the legislation, he should 
at least shew some compliance with the plain provisions laid down 
in the legislation. 



C. A. 
1912 

Rex 

v. 

SOVEREEN 
Maclaren,, J.A. 



For these reasons, and especially on the ground first set forth, 
which, in my judgment, is quite sufficient, I am of opinion that the 
third question should be answered in the negative. 



Magee, J. A.:- — Reserved case stated by the Chairman of the 
General Sessions of the Peace for the County of Norfolk. 

The accused, Wilbert Sovereen, was indicted before that 
Court in December, 1911, for that he, on the 23rd day of July, 
1911, and on other days and times before that date, did keep a 
disorderly house, that is to say, a common bawdy house, contrary 
to secs, 228 and 225 of the Criminal Code. The jury found him 
“ guilty.” 

Under sec. 228, this is an indictable offence. There is no 
limitation of time for the commencement of a prosecution for it. 
Consequently, it was open to adduce evidence such as was given, 
going as far back as May, 1910. It was objected that such evi- 
dence was inadmissible, because, under sec. 1142, in the case of an 
offence punishable upon summary conviction, the complaint must 
be made or information laid within six months, and under sec. 774 
(amended by 8 & 9 Edw. VII, ch. 9) a “magistrate,” as defined 
in sec. 771, could, without the assent of the accused, summarily 
try a person charged with keeping a disorderly house. But Part 
XVI., which includes sec. > 774, relates to indictable offences, and 
not to offences punishable under summary convictions, which 
are dealt with by Part XV. The only provisions of the Code 
under which the keeper of a disorderly house or bawdy house can 



24 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Rex 

v. 

SOYEREEN 

Maeee. J.A. 



be punished by summary conviction are secs. 238 and 239, the 
former of which declares every one who is the keeper of such a 
house to be “a loose, idle or disorderly person or vagrant ;” and 
sec. 239 makes “a loose, idle or disorderly person or vagrant” 
liable to fine or imprisonment or both. But that punishment 
is not for keeping the house, it is for being “a loose, idle or dis- 
orderly person or vagrant.” In The Queen v. Stafford (1898), 

1 Can. Grim. Cas. 239, although the charge was for being “the 
keeper of a common bawdy house,” it is evident that the proceed- 
ings must have been taken under the sections then corresponding 
to secs. 238 and 239, and the imprisonment was held to be un- 
authorised by them. As the offence here charged is punishable 
only by indictment, sec. 1142 does not apply. 

It was shewn that the defendant was the owner of the house 
in question, which was situate on a parcel of 45 acres of land 
owned by him. He resided about two and a half miles away. 
The house was “formerly occupied” by one Mrs. Denby. There 
is some reference to the fact of her having been arrested and 
convicted, but for what does not appear. Presumably it was for 
keeping this disorderly house. She left in October, 1910. During 
her occupancy, there is evidence of other women being there at 
various times, and men, and of the evil reputation of the house, 
and of instances of prostitution by inmates, and of lewd conduct 
by this defendant with Mrs. Denby and another woman, and of his 
having been “hundreds of times” in the bed-room with the 
former, and of his having invited there one witness who was there 
several times, and says the house was one of ill-fame, and that 
this defendant and Mrs. Denby were the keepers — the people 
who were running the house. As to this, the witness was hardly 
cross-examined. This was clearly “some valid evidence” to 
shew that the defendant was a keeper of a common bawdy house, 
under sec. 228. 

Since October, 1910, the house, though furnished by the de- 
fendant, has been vacant, unless when he occasionally stopped 
there. The presence of one or two women there on three oc- 
casions, weeks apart, is shewn, but not the time of day, except 
once at night, nor the length of their stay. Both of them had 
been there in Mrs. Denby’s time. There is no evidence of any 
improper conduct or of other men being there. There is not, 



XXVI.] 



ONTARIO LAW REPORTS. 



25 



I think, sufficient proof of the existence of a common bawdy 
house there during this period. 

In his charge to the jury, the learned Chairman, after pointing 
out that the defendant was the owner of the house, said: “It 
had been suggested, however, that the woman who had already 
been convicted was the keeper; but I think that we have nothing 
to do with that in this case. I think that, no matter whether she 
was convicted or not, you have got to try this case upon the 
evidence that has been presented before you.” I am at a loss to 
discover any objection to this, or indeed why the learned Chairman 
was indulgent enough to reserve any question upon it. 

Another question remains as to the right of the Court to try 
the defendant. The statement of the case sets out these facts: 
“The prisoner had been committed for trial after the preliminary 
hearing, and admitted to bail, and appeared, as provided by his 
recognizances, for trial at the above-named General Sessions of 
the Peace. The bill of indictment was, however, not preferred 
by the person bound over to prosecute, but was preferred under 
directions given by the trial Judge, as provided by sec. 873 of the 
Criminal Code. Before arraignment or plea, the prisoner desired 
to elect trial by the County Court Judge, but it was held that he 
was not entitled, under the circumstances, so to elect.” I 
assume that the information laid, the preliminary hearing 
had, and the defendant’s recognizance to appear for trial, were all 
upon the same charge as the indictment. 

It is only under sub-secs. 6 and 7 of sec. 825 of the Criminal 
Code, 1906, as added in 1909 by 8 & 9 Edw. VII. ch. 9, that the 
defendant, being not in custody but under bail, could have 
claimed any right to a trial before a Judge without a jury. 
Previously, he would have had to be in actual custody either upon 
the original commitment for trial by the magistrate holding the 
preliminary inquiry, or by virtue of a surrender into custody 
after bail, or “otherwise in custody awaiting trial on the charge.” 

The new sub-section (6) provides that a person accused 
who has been bound over by a Justice under sec. 696 (i.e., to appear 
for trial), and is at large under bail, may notify the Sheriff that he 
desires to make his election under Part XVIII. (relating to Speedy 
Trials), and thereupon the Sheriff shall notify the Judge; and, 
by sub-sec. 7, the Judge having fixed the time and place for the 



C. A. 
1912 

Rex 

v. 

SOVEREEN 
Magee, J.A. 



26 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Rex 

v. 

SoVEREEN 
Magee, J.A. 



accused to make his election, the Sheriff shall notify the accused 
thereof, and the accused shall attend, and the subsequent proceed- 
ings shall be as in other cases under Part XVIII.; and, by sub-sec. 
8, the recognizance taken when the accused was bound over shall 
be obligatory with reference to his appearance at the time and 
place so fixed, and to the trial and proceedings thereupon, as if 
originally entered into with reference thereto. 

No time is specified for the giving of the notice to the Sheriff. 
If a notice were given in such a case, it would be material to 
consider at what time an election may be made by those in custody. 
The original Act providing for trials by a Judge without a jury, 
32 & 33 Viet. (1869) ch. 35, was intituled “An Act for the more 
speedy trial in certain cases of persons charged,” etc. — after- 
wards called the Speedy Trials Act — and this might give some 
colour to the idea that where the trial would not be speeded the 
Act was not intended to apply. But, excepting in the title, there 
was nothing in the wording of the Act itself so to indicate, except 
possibly the provisions that the prisoner might with his own 
consent be tried “out of Sessions,” and that the Judge was to 
tell him that he had the option to “remain untried until the next 
sittings” of the Court of General Sessions of Oyer and Terminer. 
These words did not, in fact, I think, imply that the speedy trial 
must be before the session of the jury Court began — but subset 
quent amendments removed any possibility of such a construction. 
It must, I think, be taken that the object of speedy trials indicated 
by the title was to be attained by the creation of a new tribunal — 
a Court of record— which would not be limited to half-yearly or 
other periodical sittings, but could sit at any time, and that 
tribunal being created (see Ontario statute of 1873, 36 Viet, 
ch. 8, secs. 357, 358), the positive directions to the Sheriff and the 
Judge as to their duties towards prisoners, in effect, gave each 
prisoner to whom the Act applied an option and right of election 
as to which one of the tribunals he would be tried by, or rather 
the right to have an opportunity to say he chose trial by the 
Judge. I do not think it would have been any answer to a claim 
to exercise such right to say to the prisoner, “The jury Court is 
now sitting, and your trial there can take place to-day, or sooner 
than if you are to be tried by the Judge alone.” It is now expressly 
declared in sec. 825 that the trial by the Judge shall be had whether 



XXVI.] ONTARIO LAW REPORTS. 



27 



the jury Court or the grand jury thereof is or is not then in session — - 
and I agree with the opinion of Howell, C.J.A., in Rex v. Thomp- 
son, 17 Man. L.R. 608, that this provision is not restricted to the 
trial itself. 

Then, by sec. 828, even after a prisoner has elected to 
be tried by a jury, he may notify the Sheriff that he desires 
to re-elect, and this at any time before his trial has commenced, 
and whether an indictment has been preferred against him or 
not — unless the Judge is of opinion that it would not be in the 
interest of justice to allow a second election; and, if an indictment 
has been actually preferred, the consent of the prosecuting officer 
must be obtained. 

In cases where, under Part XYI. or XVII., the prisoner had 
elected before the committing magistrate not to be tried by him, 
but by a jury, he may, under sec. 830, notify the Sheriff, before 
the sitting of the jury Court, that he desires to re-elect. 

The Code, therefore, gives three periods for the election by an 
actual prisoner as of right — before the sitting, before the prefer- 
ment of the bill, and before the trial has commenced. It would be 
difficult to say which of these should apply to the case of an 
accused person who is at large under bail; but I think it is clear 
that his notification to the Sheriff must be taken as the foundation 
of his right to put himself in the position of a prisoner as one 
entitled to be called upon to elect. That he was not in actual 
custody merely by reason of appearing, “as provided by his 
recognizance,” is manifest from sec. 1092, which declares that a 
recognizance is not discharged by arraignment or conviction. 

This defendant did not give any such notice, so far as appears; 
but, at the last moment, when called upon to answer to the in- 
dictment, said that he desired to elect. Without being in custody 
and without having given the notice to the Sheriff, he had not 
put himself in th@ position to claim that right. It appears that 
the Chairman of the Court of General Sessions held “that he was 
not entitled under the circumstances” so to elect. Therein the 
Chairman was right, as no notification had been given. 

The defendant then pleaded to the indictment, or a plea must 
have been entered for him, as the trial proceeded, and he was by 
the jury found “guilty.” There is nothing to indicate that any 
other result might have been arrived at if the Chairman had been 



C. A. 
1912 

Rex 

v. 

SOVEREEN 
Magee, J.A. 



28 


ONTARIO LAW REPORTS. [vol. 


C. A. 
1912 


trying the case without a jury, and there is no reason to suppose 
that there was any failure of justice through the defendant’s 


Rex 

V. 

SOYEKEEN 


omission. 

I would answer the first question in the affirmative, the second 


Magee, J.A. 


and third in the negative. 

Garrow, J.A., and Latchford, J., concurred. 



Conviction affirmed. 



XXVI.] 



ONTARIO LAW REPORTS. 



29 



[IN THE COURT OF APPEAL.] 

Re Village of Brussels and McKillop Municipal 
Telephone System. 

Re Village of Blyth and Township of McKillop. 

Ontario Railway and Municipal Board — Jurisdiction — Separate Telephone 
Systems in Adjacent Territories — Order for Connection and Inter- 
communication and Construction and Operation of Switch-board and 
Trunk Line — Ontario Telephone Act, 1910 — Agreement with Bell Tele- 
phone Company Approved by Board — Applications to Board — Parties — 
Township Corporation — “Municipal Telephone System ” — Power of one 
Member of Board to Make Order. 

The Corporation of the Village of Brussels applied to the Ontario Railway 
and Municipal Board for an order compelling “The McKillop Municipal 
Telephone 'System” to establish connection, intercommunication, joint 
operation, reciprocal use, and transmission of business between the ap- 
plicants’ and the respondents’ telephone systems; and the Board made 
an order accordingly, and by a subsequent order refused to rescind it; from 
which orders the township corporation, representing the subscribers to 
the township telephone system, appealed. The first order required the 
appellants to build and operate a switch-board and a trunk telephone 
line. It appeared that the appellants were operating under an agree- 
ment made between them and the Bell Telephone Company, substantially 
for the purposes recognised and authorised by sec. 8 of the Ontario 
Telephone Act, 1910, which agreement had been approved by the Board 
prior to the application made by the village corporation: — 

Held, that the result of obedience to the order appealed against would be 
to alter or vary the relations based upon the agreement with the Bell 
Telephone Company approved by the Board; and the Board had no 
jurisdiction to do that, unless upon an application for the purpose with 
proper parties before it. 

Held, also, that the order made (involving a large expenditure) was not, 
even apart from the agreement with the Bell Telephone Company, auth- 
orised by any of the provisions of the Act; Maclaren, J.A., expressing 
no opinion as to this; and Magee, J.A., inclining to the contrary opinion. 
Per Moss, C.J.O., and Meredith, J.A. : — The application should have been 
made against the township corporation, not against the “system,” 
which was not a legal entity. 

Per Meredith, J.A. : — There was no power in one member of the Board to 
hear the application and make the order; and the Bell Telephone Com- 
pany should have been given an opportunity to be heard upon the appli- 
cation. 

Orders of the Board set aside for want of jurisdiction. 

An order of similar purport made by the Board upon the application of the 
Corporation of the Village of Blyth was also set aside. 

Appeals in two separate matters from orders of the Ontario 
Railway and Municipal Board. 

The first appeal was by the McKillop Municipal Telephone 
System from two orders made by the Board. 

The first order was made on the 10th March, 1911, on the 
application of the Municipal Corporation of the Village of Brussels, 
who named as respondents “The McKillop Municipal Telephone 
System,” and was as follows: — 



C. A. 
1912 

March 6 



30 

C. A. 
1912 

Re 

Tillage of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 



ONTARIO LAW REPORTS. [vol. 

Upon the application of the said applicants, and upon hearing 
what was alleged by counsel for the applicants and respondents, 
and for the Bell Telephone Company of Canada, and the Board 
having referred this application for consideration and report to 
its expert, upon consideration of the said expert’s report: — 

The Board, under and in pursuance of sec. 9 of the Ontario 
Telephone Act, 1910, orders connection, intercommunication, 
joint operation, reciprocal use, and transmission of business be- 
tween the applicants’ and respondents’ telephone systems or lines. 

The Board further orders and directs the applicants to con- 
struct, build, and maintain a trunk telephone line from their 
switch-board in their central office in the village of Brussels, to a 
point on the gravel road half-way between the village of Brussels 
and the town of Seaforth. 

The Board further orders that the applicants shall bear all 
the cost of building, constructing, and maintaining the said trunk 
line, and of equipping and operating the switch-board in the 
central office in the said village of Brussels, and shall allow the 
use of the same and of all their lines to the respondents, or any of 
them, on the basis of a charge of five cents for each call or con- 
nection. 

And it is further ordered that the respondents shall build, 
install, maintain, and operate a switch-board in or adjacent to 
the town of Seaforth, and construct, build, and maintain a trunk 
telephone line therefrom to the above-mentioned point on the 
gravel road, half-way between the town of Seaforth and the 
village of Brussels, being the point up to which the said applicants 
have been hereinbefore directed to construct their line as afore- 
said. 

And it is further ordered that the respondents shall bear and 
pay all the cost of building, constructing, and maintaining the 
said trunk line, and of equipping and operating the said switch- 
board in a central office in or adjacent to the said town of Seaforth, 
and shall allow the use of the same and of all their lines to the 
applicants, or any of them, on the basis of a charge of five cents 
for each call or connection. 

And it is further ordered that, should any person who is not 
a subscriber to either the system of the applicants or the re- 
spondents, desire to avail himself of the use of the said switch- 



XXVI.] 



ONTARIO LAW REPORTS. 



31 



board and lines, or any of them, then that a charge of twenty 
cents shall be made and collected therefor, together with messenger 
service, if any, which sum or sums shall be paid in to the office 
from which the call originated, and that the said charge of twenty 
cents, exclusive of messenger, shall form a common fund, and be 
divided monthly between the applicants and the respondents, 
equally, share and share alike., 

And it is ordered that the said switch-boards and trunk line 
shall be built, constructed, and equipped and the connection 
between the telephone systems and lines of the applicants and 
respondents shall be made and completed, all within the space 
of two months from the date of this order. 

And it is further ordered that the terms of this order for 
connection, intercommunication, joint operation, reciprocal use, 
and transmission of business between the systems of the applicants 
and respondents may be superseded with the approval of this 
Board by a mutual agreement in writing to be made by and 
between the applicants and respondents. 

The McKillop Municipal Telephone System applied to the 
Board to set aside or vary the order of the 10th March, 1911; 
and that application was dismissed by the Board by order made 
on the 5th May, 1911. This was the second order appealed 
against. 

The second appeal was by the Municipal Corporation of the 
Township of McKillop from an order of the Board, dated the 
20th June, 1911, made on the application of the Municipal Cor- 
poration of the Village of Blyth, naming the township corporation 
as respondents, for an order directing connection, intercommuni- 
cation, etc., between the telephone systems of the applicants and 
the respondents. 

The order directed, amongst other things, that the township 
corporation should build, maintain, and operate a switch-board 
in or adjacent to the town of Seaforth, in the county of Huron, 
and should construct, build, and maintain a trunk line from the 
town of Clinton on the main gravel road between that town and 
the village of Blyth to a point on the road distant two and one- 
half miles north of the town of Clinton, being the point up to 
which the village corporation were also ordered and directed to 
construct their portion of the line. The township corporation 



C. A. 
1912 

Re 

Village of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 



32 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Re 

Village of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 



were also ordered to pay all the cost of building, constructing, and 
maintaining the trunk line and of equipping a switch-board and 
a central office in or adjacent to the town of Seaforth, and to allow 
the use of the same and of all their lines to the village corporation 
or any of their subscribers, on payment of a charge of five cents 
for each call or connection. 

November 21 and 22, 1911 The appeals were heard by Moss, 
C.J.O., Garrow, Maclaren, Meredith, and Magee, JJ.A. 

M. K. Cowan, K.C., and R. S. Hays, for the appellants. The 
orders appealed from should be varied or rescinded. The appel- 
lants are operating municipal telephone systems under the pro- 
visions of the Local Municipal Telephone Act, 8 Edw. VII. ch. 49, 
but have no switch-board of their own, their switching being 
done by • the Bell Telephone Company, under an agreement 
approved by the Ontario Railway and Municipal Board, in 
accordance with the provisions of sec. 10 of the Ontario Telephone 
Act, 1910. By the terms and conditions of the orders appealed 
from, the appellants’ systems will be required to terminate their 
agreements and connections with the Bell Telephone Company, 
and so lose the rights and benefits they now enjoy, as well as 
being saddled with great additional expense. We submit that, 
under sec. 6 of 6 Edw. VII. ch. 31, the hearing of this case on the 
24th February, 1911, in the presence of only one member of the 
Board, was irregular and illegal, and that the Board had no 
power or authority to make any order based upon such a hearing. 
The facts adduced do not disclose the necessity of an order as 
asked for by the respondents. The provisions of sec. 9 of the 
Act of 1910 are not intended to be imperative, requiring the 
Board to make an order in every case applied for. If the phrase- 
ology of that section appears to be imperative, its spirit is dis- 
cretionary. Such discretion is a judicial and not an arbitrary 
one. We further submit that the Board has no jurisdiction 
whatever to make or to enforce the carrying out of the orders 
appealed from; and, moreover, the appellants have no power or 
authority to raise further moneys for the purpose of reconstructing 
the systems in compliance with the orders of the Board. The 
appellants’ systems are not complete systems, having each one 
central switch-board and main trunk lines running therefrom, 
within the meaning of secs. 8 and 9 of the Act of 1910. 



XXVI.] 



ONTARIO LAW REPORTS. 



33 



H. D. Gamble, K.C., for the respondents the Corporation of 
the Village of Blyth. The orders appealed from are right, and 
should be affirmed. They do not interfere with any agreement 
between the Bell Telephone Company and the appellants. See 
the Ontario Railway and Municipal Board Act, 1906, sec. 17, 
sub-secs. 2 and 3. Moreover, the appellants do not of necessity 
lose connection with adjacent townships, and they may agree to 
connect their system with that of such townships, under sec. 8 of 
the Act of 1910, or, in case of refusal, connection may be ordered 
by the Board under sec. 9 of the same Act. The language of the 
Act of 1910, sec. 9, is imperative; and the Railway Board has no 
option in the matter of ordering connection; but the terms and 
conditions upon which such connection is brought about are in 
the sole discretion of the Board. Nothing turns upon the fact 
that the agreement between the Bell Telephone Company and the 
appellants was ratified by the Board, when it is observed that, 
by the order ratifying, the Board reserves the right to rescind or 
vary it in any way they may desire. The question of expense of 
building and maintaining the necessary switch-board and other 
appliances for connection between the appellants’ and respondents’ 
systems, be the expense much or little, does not give any right to 
appeal. This, expense is only a question of fact, part of the terms 
and conditions imposed upon the appellants, and the Board’s 
decision upon all matters of fact is final and conclusive. See 
sec. 41, sub-sec. 3, of the Ontario Railway and Municipal Board 
Act, 1906. As to the proceedings before the Board on the 24th 
February, 1910, we submit that the appellants have no cause of 
complaint, because, after the order had been made, a rehearing 
of the application was granted them, whereat the whole evidence 
was gone over, and every opportunity was given the appellants 
to present their case fully. As to the objection that there is no 
authority in the statute by which the expense of installing the 
necessary equipment may be provided for in order to comply 
with the order of the Board, we submit that under sec. 11, sub- 
sec. lb, and sec. 13, sub-sec. 6, of the Act of 1908, the appellants 
may pass the necessary supplementary by-law and levy the cost 
upon the subscribers ; but, if these sections do not confer the right, 
then the order of the Board carries with it the necessary authority 
to raise the money, and the Board may, under sec. 20 of the 



C. A. 
1912 

Re 

Village of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 



3 — XXVI. O.L.R. 



34 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Re 

Village of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 



Ontario Railway and Municipal Board Act, 1906, build the 
appellants’ portion of the line, construct and establish the neces- 
sary switch-boards to complete the connection, and assess the 
amount against the appellants; and, what the Board may do 
for the appellants, they may do themselves. 

W. M. Sinclair , for the respondents the Corporation of the 
Village of Brussels. The arguments advanced on behalf of Blyth 
apply with equal force to the Brussels case. As to the jurisdiction 
of the Board, see sec. 30 of the Ontario Railway and Municipal 
Board Act, 1906, and sub-sec. 3 of sec. 11 of the Local Municipal 
Telephone Act, 1908. Section 43 of the Ontario Railway and 
Municipal Board Act, 1906, does not allow appeals on questions 
of fact; and, therefore, the appellants have no right to be here. 

Hays, in reply. 



March 6, 1912. Moss, C.J.O. : — These are appeals from orders 
or decisions pronounced by the Ontario Railway and Municipal 
Board. So far as the respondents to the appeals are concerned, 
the matters are separate and distinct; but substantially the same 
questions are involved; and the appeals, which were heard during 
the same sittings of the Court, may be conveniently dealt with 
together. 

The first two in point of time of the orders complained of were 
pronounced upon an application made by the Corporation of 
Brussels, on which they named as respondents “The McKillop 
Municipal Telephone System.” This was not a proper proceed- 
ing. While it seems that there is an association of individual 
subscribers who for convenience act under that name, it does not 
appear that there is any corporate body or company known to 
the law capable of responding by that name to the application 
made by Brussels to the Board for the orders now in question. 
Having been constructed and installed in 1908, under the pro- 
visions of the Local Municipal Telephone Act, 1908, the system 
and all works and property acquired, erected, or used in connec- 
tion therewith, became vested in the Municipality of McKillop 
in trust for the benefit of the subscribers. The opposition to the 
application was made through the municipality; but it may be 
questioned whether, in the form in which the proceedings now 
stand, the orders made could be effectively enforced, if capable 
of enforcement under any circumstances. 



XXVI.] 



ONTARIO LAW REPORTS. 



35 



But more formidable objections appear when the substantial 
questions between the parties are examined. 

The respondents the Corporation of the Village of Brussels, 
as trustees for the subscribers of the local telephone system 
known as the Brussels Morris and Grey Telephone System, made 
application in October, 1910, to the Ontario Railway and Muni- 
cipal Board for an order for connection, intercommunication, or 
reciprocal use in the transmission of business between the tele- 
phone systems of the respondents and the appellants. The 
applicants alleged that their system was located in the territory 
immediately adjacent to the appellants’; and that they had been, 
for some months previous to their application, desirous of entering 
into an agreement with the appellants for such connection, inter- 
communication, or reciprocal use; but the latter had declined to 
do so. Apparently, the application was based upon sec. 9* of the 
Ontario Telephone Act, 1910 — 10 Edw. VII. ch. 84 — which seems 
to be the only enactment that affords any warrant for the applica- 
tion. 



C. A. 
1912 

Re 

Village of 
Brussels 

AND 

MoKillop 

Municipal 

Telephone 

System. 

Moss, C.J.O. 



It is very difficult, however, to give any intelligible meaning 
to the language of the section. Read literally, it does not compre- 
hend this case; on the contrary, it would seem to be providing 
for some case of a company or person, as defined by sec. 2 (c)f of 
the Act, having two or more systems or lines “ located in 
territory adjacent to each other.” Doubtless, this was not the 
intention; but, in the present form of the section, the real intention 
is not clearly expressed. The order of the Board dated the 10th 
March, 1911, which directs connection, intercommunication, 
joint operation, reciprocal use, and transmission of business, pur- 
ports to be made in pursuance of sec. 9; but, as pointed out above, 

*9. Wherever the telephone systems or lines of any company or person 
are located in territory adjacent to each other and in the event of any 
company or person owning, controlling, or operating one or more of the said 
telephone systems, refusing or neglecting to enter into an agreement for 
any or all of the purposes mentioned in the next preceding section, the Board 
shall issue an order providing for such connection, intercommunication, 
joint occupation, reciprocal use, or transmission of business upon such terms 
and conditions as it may deem advisable. 

f 2. (c) “Company or Person” shall mean any Company, Corporation, 

Municipal Corporation, Association, individual or aggregation of individuals 
owning, controlling, or operating a telephone system or lines within the 
Province of Ontario, and not within the legislative authority of the Parlia- 
ment of Canada. 



36 

C. A. 
1912 

Re 

Village of 
Brussels 
and 

MoKillop 

Municipal 

Telephone 

System. 

Moss, C.J.O. 



ONTARIO LAW REPORTS. [vol. 

that section is halting and uncertain in expression; and, in strict- 
ness, it does not confer jurisdiction in this particular case. 

There still remains the question of jurisdiction dependent 
upon the existence of an agreement between the appellants and 
the Bell Telephone Company, substantially for the purposes 
recognised and authorised by sec. 8* of the Ontario Telephone 
Act, 1910, and which had been approved of by the Board prior 
to the application by Brussels. 

The appellants and the Bell Telephone Company were working 
under this agreement when the orders now in question were made 
by the Board. It is said that there was no intention to interfere 
with that agreement, and that there is in fact no interference 
with it. 

But it is obvious that compliance with the order by the appel- 
lants does seriously alter their relations with the Bell Telephone 
Company. It exposes them to the consequences of a breach of 
the agreement, and may deprive them of the benefits and advan- 
tages which they now enjoy under it. And, while the agreement 
remains as an existing agreement sanctioned and approved by 
the Board, the Bell Telephone Company are entitled to assert 
their rights under it and to claim that they should remain undis- 
turbed and unaffected as long as the agreement stands. The 
Board has undoubted power to rescind the order for good cause, 
but the jurisdiction to do so should be exercised only upon a 
properly framed application for that purpose, to which all those 
who are interested are parties or of which they are properly 
notified. 

At present, the agreement is a valid subsisting agreement; 
and, while, upon an application regularly framed and constituted 
as to parties, the Board may determine its true meaning, yet 
while it stands the Board is without power or jurisdiction to 
alter or vary it. 

* 8. Subject to the approval of the Board every company or person shall 
have power to enter into any agreement or agreements with any other 
company or person for the purpose of providing for connection, intercom- 
munication, joint operation, reciprocal use, or transmission of business as 
between the respective systems controlled, owned or operated by such 
companies or persons, and may make such arrangements as shall be deemed 
advisable for the proper apportionment of expenditures and commissions, 
the division of receipts and profits, or such other adjustments as may be 
necessary under any such agreement. 



XXVI.] 



ONTARIO LAW REPORTS. 



37 



And the important question is, whether the Board has, in 
the present state of the legislation, any power or jurisdiction to 
order the performance of work of construction and connection 
with the Brussels system, involving the expenditure of money 
upon capital account by the subscribers to the appellants’ system. 
There are no express provisions covering such a case; and the 
different sections to which we were referred by counsel for the re- 
spondents fall far short of supplying the necessary machinery 
for imposing or collecting funds to meet the outlay which obedience 
to the orders imposes. 

Apart from these latter considerations, however, the want of 
jurisdiction to deal with the application made on behalf of Brussels, 
based upon the other grounds referred to, is sufficient reason for 
allowing the appeal. 

There is no difference in substance between the case of Brussels 
and the case of the application by the Corporation of the Village 
of Blyth. Except as to the form of the application with respect 
to the parties respondent, all the objections to the power and 
jurisdiction of the Board apply with the same force as in the 
Brussels case. The order complained of in the Blyth case is to 
the same effect as that pronounced in the Brussels case. The 
appeal is on the same grounds, and the result should be the same. 

Both appeals should be allowed, and the orders complained 
of be set aside with costs to the appellants in each case. 



C. A. 
1912 

Re 

Village of 
Brussels 
and 

MoKillop 

Municipal 

Telephone 

System. 

Moss, C.J.O. 



Garrow, J.A., concurred. 

Maclaren, J.A. (Brussels case): — This is an appeal by the 
Corporation of the Township of McKillop, representing the 
subscribers to the municipal telephone system of the township, 
on leave granted by the Court, from an order of the Ontario 
Railway and Municipal Board of the 10th March, 1911, ordering 
the appellants to build and operate a switch-board in or adjacent 
to the town of Seaforth and a trunk telephone line therefrom to a 
point half-way between Seaforth and Brussels, there to connect 
with the Brussels line to that village; and from an order of the 
said Board of the 5th May, 1911, refusing to vary or rescind the 
order of the 10th March. 

The appellants were organised under sec. 11 of the Local 
Municipal Telephone Act, 1908, 8 Edw. VII. ch. 49, but have no 



38 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Re 

Village of 
Brussels 

AND 

MoKillop 

Municipal 

Telephone 

System. 

Maclaren, J.A. 



switch-board of their own, their switching being done by the 
Bell Telephone Company, in Seaforth, under an agreement which 
was duly approved by the said Board in accordance with the pro- 
visions of sec. 10 of the Ontario Telephone Act, 1910, 10 Edw. 
VII. ch. 84. Section 11 of this Act provides that no company or 
person owning such a telephone system or lines shall enter into 
any contract, agreement, or arrangement with any other com- 
pany having authority to construct or operate a telephone system 
or line, restricting competition in the supply of such service, 
unless the same is just and reasonable, and until such contract, 
agreement, or arrangement has been submitted to and received 
the assent of the Board. 

The said agreement contained a provision that during its 
continuance the appellants should not connect their telephone 
system with the system of any company or persons operating in 
competition with the Bell Telephone Company, and without the 
consent of the Bell Telephone Company; and it appeared that the 
applicants in this matter operated in opposition to the Bell Tele- 
phone Company, and that the latter refused the appellants the 
right to connect their system with that of the applicants. 

The applicants relied upon a clause in the approval of the 
Board, to the effect that the right of revoking or varying the order 
was reserved; but, in my opinion, such reservation does not confer 
any greater power upon the Board than is found in the Ontario 
Railway and Municipal Board Act, 1906, 6 Edw. VII. ch. 31, sec. 
19 (4), which says that “The Board may review, rescind, change, 
alter or vary any rule, regulation, order or decision made by it.” 



By sec. 14 of the Ontario Telephone Act, 1910, it is expressly 
enacted that the Board shall not have the power “to alter or 
vary any agreement between a municipal corporation and a 
company, or between two or more companies or persons.” What 
they cannot do directly, I do not think they can do indirectly or 
by a side wind, as is attempted by the orders now appealed from. 

The agreement between the McKillop telephone subscribers, 
which must have been found by the Board to have been just 
and reasonable when they gave it their approval, should stand 
until, after proper notice to the parties, they have an opportunity 
of stating their objections to the variance or revocation of such 
approval. So long as such approval stands unchanged and unre- 



XXVI.] 



ONTARIO LAW REPORTS. 



39 



yoked, I am of opinion that the Board is without jurisdiction to 
pass such orders as are now in appeal. 

I do not consider it necessary at present to consider the other 
matters argued before us, or to express any opinion as to whether 
or not the orders in question would be a compliance with the pro- 
visions of sec. 9 of the Ontario Telephone Act, 1910, even if the 
above objection did not exist. 

In my opinion, the appeal should be allowed. 

(Blyth case.) The same objection applies to the order of 
the Ontario Railway and Municipal Board in this case as in the 
Brussels case; and, for the reasons given therein, I am of opinion 
that the appeal should b^ allowed and the orders set aside. 



C. A. 
1912 

Re 

Village of 
Brussels 

AND 

MoKillop 

Municipal 

Telephone 

System. 

Maclaren, J.A. 



Meredith, J.A. (Brussels case) The appellants have a 
local telephone system which satisfies all their needs; and they 
are naturally opposed to any action which would disturb that 
system or the very satisfactory arrangements made between 
them and the Bell Telephone Company, under which the appel- 
lants’ lines are operated by the company and under which the 
subscribers to the appellants’ system are also given intercommun- 
ication with the company’s subscribers ; and under which arrange- 
ments the appellants are bound not to make connection with any 
other system. 

Upon an application made by the respondents to the Ontario 
Railway and Municipal Board, which was heard by one member 
of the Board only, an order was made requiring the appellants to 
connect their system with that of the respondents, and to give 
intercommunication between the subscribers of each, and, for 
that purpose, to build and operate a trunk line and a switch- 
board — which would, of course, necessitate providing also a 
room, light, and heat sufficient for the purpose. The order, if 
obeyed, would compel the appellants to break their agreement 
with the Bell Telephone Company and put an end to all their 
rights and benefits under it, obliging them to operate their own 
lines at very considerable continued expense, in addition to the 
very considerable expense of doing the work ordered to be done 
by them; entirely reversing their policy in the operation of their 
lines and making the operation much more costly, as well as 
depriving them of the benefits of intercommunication with the 
Bell Telephone Company’s subscribers; unless, indeed, that 



40 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Re 

Village of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 

Meredith, J.A. 



company should see fit to make some other agreement with 
them, which neither they nor the Board would gave any power 
to compel. 

If the Board had the power to do this injustice, the appel- 
lants must submit to it, as well as must the Bell Telephone Com- 
pany, for in that case there would be no right of appeal; but, if 
the Board had no such power, this Court can and must relieve 
the appellants from it: and the power to make such an order 
ought to be made to appear with very reasonable clearness to be 
upheld in this Court; but I am unable to find, in all the legislation 
upon the subject, sufficient authority to support it. 



The first question that strikes the mind, in dealing with the 
case, is: where is the money to come from which must be ex- 
pended in obeying the order? And it must be borne in mind 
that, if the power exist, there is no limit of the amount which the 
Board may thus require to be expended; it may be little in one 
case, but it may be very great in another, and that quite apart 
from any damages any one might be compelled to pay for breach 
of contract such as that involved in this case. I have been unable 
to find any source from which the money which must be paid 
out, if the order in appeal is complied with, is to come; and I 
cannot help thinking that, if the subscribers to such systems 
could be so made personally liable, they might go a long time with- 
out the advantages of a telephone rather than run the risk of being 
burdened with the cost of doing that which is altogether against 
their wishes, and that which they believe to be their best interests, 
upsetting their whole plan of operation, compelling a breach of 
their contract, with whatever consequences might follow from it, 
as well as requiring them to do that which they have carefully 
provided against — operate their own system. The cost of con- 
structing and maintaining a system is to be paid by the “ init- 
iating municipality/’ and may be recovered from the subscribers 
in the manner provided for in the enactments; but such “cost” 
must, I think, under the words of the enactment, as well as the 
reasonableness of the thing, be limited to the construction and 
maintenance of the system as contemplated and desired by the 
subscribers, and which they have petitioned the municipality 
to undertake for them, and riot a different system which they do 



XXVI.] 



ONTARIO LAW REPORTS. 



41 



not desire, but which some other system endeavours to force 
upon them; and, of course, there is no warrant for compelling the 
municipality to pay without recoupment. 

It may very well be that the Board would have power to 
order connection and intercommunication where the applicants 
were willing to pay the cost of making the connection and where 
it could be done without inflicting upon any party such injustice 
as the appellants reasonably complain of in this case. I can 
find no sufficient authority for an order which has the effect of 
the order made in this case; nor is there any need for it. 

There is no good reason why the respondents should not make 
arrangements with the Bell Telephone Company similar to those 
made by the appellants with that company, arrangements 
which evidently could be made at much less cost and which would 
not only give the respondents all they sought in this application, 
but also intercommunication with the company’s subscribers as 
well; but that they would not, because, I have no doubt, of some 
feeling against, and concerted opposition to, that company, 
to give effect to which the appellants are to be driven from their 
alliance with it, and compelled, at great cost, to establish switching 
stations and operate their own lines, as well as to lose the benefit 
of intercommunication over the Bell system, and take the conse- 
quences of a breach of the agreement with the company. 

For two other reasons, I am also of opinion that the order 
cannot stand: (1) there was no power in one member of the Board 
to hear the application and make the order; and (2) the applica- 
tion should have been made against the municipality, not against 
the “system, ” which is not a legal entity: and there is still another 
reason, which I shall mention in dealing with the like case of 
Blyth and McKillop. 

The order should, I think, be rescinded for want of juris- 
diction. 

(Blyth case.) This case is quite the same as the Brussels 
case, in which I have just expressed my opinion, except in these 
respects: (1) the initiating municipality is properly proceeded 
against; and (2) the application was heard, and the order made, 
by the full Board: and, therefore, all that I have said in the other 
case, except in these respects, applies fully to this case: but I 



C.A. 

1912 

Re 

Village of 
Brussels 
and 

MoKillop 

Municipal 

Telephone 

System. 

Meredith, J.A. 



42 



ONTARIO LAW REPORTS. [vol. 



G. A. 
1912 

Re 

Village of 
Brussels 

AND 

McKillop 

Municipal 

Telephone 

System. 

Meredith, J.A. 



desire to add a few observations now, applicable alike to each 
case. 

The Bell Telephone Company are materially affected by the 
order; and, according to first principles in the administration of 
justice, ought to have been given an opportunity of being heard 
upon the application: they might have desired to oppose it upon 
the merits, if the Board had jurisdiction: and they might also 
have desired to contend, and possibly might have been able to 
convince the Board, that the order sought would be one 
substantially affecting rights in them, over which, not being a 
provincial corporation, the Board had no power: see sec. 2 (c) 
of the Ontario Telephone Act, 1910. 

This appeal should, therefore, be dealt with in the same 
manner as the other. 



Magee, J.A.: — Looking at the provision for extensions in 
secs. 5, 7, and 11 of the Local Municipal Telephone Act, 1908, 
and the provisions for connection and switch-boards in secs. 10 
and 11, and the amendments in 1910 and 1911 by 10 Edw. VII. 
ch. 92, secs. 1 and 4, and 1 Geo. V. ch. 56, sec. 2 (13 a., (5), (6)), 
I am inclined to think the council would be entitled to collect 
from the subscribers the additional cost imposed upon it by 
law. It would appear to be one of the risks run by those who 
invoke for their private convenience the authority of the muni- 
cipality to use the highways for the poles and lines, and break, 
dig, and trench the same, or private property, that they may be 
called upon to submit to more extension and expense and a wider 
connection than they originally contemplated. As the munici- 
pality is, under sec. 10, authorised to enter into agreements for 
connection with other systems, I would think that, under sec. 4 
of the Ontario Telephone Act, 1910, the Board would have power 
to order it to do so. 

But, for the other reasons stated by my Lord the Chief Justice, 

I agree that the appeals should be allowed. 



Appeals allowed. 



XXVI.] 



ONTARIO LAW REPORTS. 



43 



[DIVISIONAL COURT.] 

Rice v. Galbraith 

Principal and Agent — Agent’s Commission on Sale of Land — Employment 
of Agent to Find Purchaser — Vendor and Purchaser Brought together 
\ by Intervention of Agent — Sale Effected by Vendor without Know- 
ledge of Agent’s Introduction of Purchaser. 

Where the defendant employed the plaintiffs, who were brokers, to sell his 
property, and imposed no time-limit, and never revoked their authority 
to find a purchaser., and the plaintiffs brought the property to the notice 
of one who became the purchaser, though the negotiations were not 
conducted by the plaintiffs, and the defendant, when lie closed the 
transaction, did not know that the plaintiffs had brought the property 
to the notice of the purchaser: — 

Held, that the plaintiffs were entitled to a commission upon the sale-price. 
Review of the authorities. 

Wilkinson v. Alston (1879), 48 L.J.Q.B. 733, applied and followed. 
Locators v. Clough (1908), 17 Man. L.R. 659, disapproved. 

Judgment of Denton, Jun. Co. C.J., York, reversed. 

Appeal by the plaintiffs from the judgment of Denton, 
Jun. Co. C.J., dismissing an action in the County Court of the 
County of York for commission on the sale-price of the defendant’s 
land, upon a sale brought about by the efforts of the plaintiffs 
as the defendant’s agents for sale, as they alleged. 

February 16. The appeal was heard by a Divisional Court 
composed of Clute, Latchford, and Sutherland, JJ. 

G. H. Kilmer, K.C., for the plaintiffs. In the Court below 
the case was decided in favour of the defendant, on the ground 
that he did not know, when he sold to the purchaser, that she 
was the plaintiffs’ client. Assuming the facts, which are not 
open to dispute, that the defendant employed the plaintiffs to 
sell the property, and that the plaintiffs brought it to the notice 
of the purchaser, their right to the commission is established, 
and is not affected by the fact that, when the defendant sold the 
property, he did not know that the purchaser was the client of the 
plaintiffs: Sager v. Sheffer (1911), 2 O.W.N. 671, and the case 
there cited of Wilkinson v. Alston (1879), 48 L.J.Q.B. 733; Bur- 
chell v. Gowrie and Blockhouse Collieries Limited, [1910] A.C. 
614. The learned trial Judge relied on the case of Locators v. 
Clough (1908), 17 Man. L.R. 659; but it is submitted that the 
authorities above cited should be followed in preference to the 
Manitoba case. 

J. J. Maclennan, for the defendant, argued that the Manitoba 
case was absolutely in point, and should be followed. The agent, 



D. C. 
1912 

March 8. 



t 



ONTARIO LAW REPORTS. [vol. 

in order to be entitled to a commission, must do more than 
merely say that certain premises are for sale — he must be the 
efficient cause, the causa causans, of the transaction : Burchell v. 

Galbraith. Gowrie and Blockhouse Collieries Limited, supra, in which case 
the agent was an active intermediary, and did more than merely 
introduce the purchaser. Locators v. Clough, supra, was an 
unanimous judgment of the Manitoba Court of Appeal, and 
shews that the onus is on the plaintiffs to shew that but for their 
intervention the sale would not have taken place. He also 
referred to Stratton v. Vachon (1911), 44 S.C.R. 395, per Duff, J., 

, at p. 406, where he refers to Lord Atkinson’s judgment in the 
Burchell case, at p. 624. [Sutherland, J., referred to Singer v. 
Russell (1912), 25 O.L.R. 444.] 

Kilmer, in reply, argued that the plaintiffs had rendered valu- 
able service to the defendant in connection with the sale, and 
referred particularly to the judgment of Cotton, L.J., in the 
Wilkinson case, at p. 736. 

March 8. Clute, J.: — The action is for a commission on 
the sale of land. The defendant listed the property with the 
plaintiffs, real estate brokers, in Toronto, for sale. It is clearly 
established that the plaintiffs brought the property to the notice 
of Mrs. Rough, who subsequently became the purchaser. The 
house was examined by her at the instance of the plaintiffs. Mrs. 
Rough is under the impression that her attention was first brought 
to the house at the instance of her brother-in-law, Mr. Blackie; 
but in this, I think, she is mistaken; and the Judge, while not 
deciding the point, seemed also inclined to that view. 

Subsequently, another brother-in-law of hers got in communi- 
cation with one of the builders, and so with the defendant, Gal- 
braith, and, acting for Mrs. Rough, finally agreed upon the 
purchase-price, which was $100 less than the defendant had 
instructed the plaintiffs to accept. 

Upon the evidence, there can be no reasonable doubt that it 
was through the action of the plaintiffs that the defendant got 
in communication with the purchaser; and so I think it may be 
fairly found upon the evidence that the sale would not have been 
brought about but for the action of the plaintiffs. But it is 
said, and the judgment below proceeds upon this sole ground, 
that the sale was in fact made by the defendant without knowing 



44 



D. C. 
1912 



Rice 

15 . 



XXVI.] 



ONTARIO LAW REPORTS. 



45 



at the time that the attention of the purchaser had been brought 
to the premises by the plaintiffs. Upon this ground the trial 
Judge found for the defendant, following Locators v. Clough , 
17 Man. L.R. 659. The judgment is by the Court of Appeal. 
Phippen, J.A., by whom the judgment of the Court was given, 
sa}^s: “I have no doubt that had the defendant sold with knowl- 
edge that the property had been introduced to Forrest by the 
plaintiffs, he would be liable for some commission. I cannot, 
however, hold that the mere introduction of the property to 
Forrest without endeavouring to negotiate or in fact negotiating 
a sale is itself an earning of the agreed commission, the owner 
effecting a sale on terms less favourable than those expressed 
in the commission contract, in ignorance of the plaintiffs’ action 
and under circumstances which did not place him upon inquiry.” 

I do not take this to be the law. A number of the cases 
bearing upon this point are referred to in Sager v. Sheffer, 2 O.W.N. 
671. It has been held sufficient in most cases that the agent has 
been instrumental in bringing the purchaser and vendor together, 
although the negotiations are subsequently conducted exclusively 
by the parties. “If the relation of buyer and seller is really 
brought about by the act of the agent, he is eiititled to commission 
although the actual sale has not been effected by him:” Green v. 
Bartlett (1863), 14 C.B. N.S. 681, 685; Steere v. Smith (1885), 
2 Times L.R. 131. “It is sufficient if the purchaser becomes 
such through the agent’s intervention:” Mansell v. Clements 
(1874), L.R. 9 C.P. 139. Wilkinson v. Alston, 48 L.J. Q.B. 733, 
is a very strong case in the plaintiffs’ favour. This was not 
referred to in the Manitoba case. 

The recent case of Burchett v. Gowrie and Blockhouse Collieries 
Limited, [1910] A.C. 614, was applied in Stratton V. Vachon, 44 
S.C.R. 395. The last case proceeds upon the ground that the 
agent had brought the owner into relation with the person who 
finally became the purchaser, and was, therefore, entitled to the 
customary commission. 

The plaintiffs having brought the parties together and a sale 
having been effected by their intervention, it is not sufficient, 
in my opinion, to disentitle them to a commission to say that 
the vendor had proceeded with his negotiations with the pur- 



D. C. 
1912 

Rice 

v. 

Oaxjbeaith. 

Clute, J. 



46 

D. C. 
1912 

Rice 

v. 

Gaolbraith. 
Clute, J. 



ONTARIO LAW REPORTS. [vol. 

chaser without the knowledge that the agents had been instru- 
mental in bringing the parties together. 

I think this point was involved in the decision in the Wilkinson 
case. After various negotiations, in that case, the sale was finally 
made by the agent writing a letter to a broker reminding him that 
the vessel was for sale. The broker took no notice of this letter, 
and neither the plaintiff nor the defendant was aware that the 
letter was written, but subsequently the broker wrote to the 
defendant, and afterwards disclosed the name of the principal 
for whom he was acting, and the sale was then effected. Bramwell, 
L.J., put the case very broadly: “The defendant practically said 
to the plaintiff, ‘If you or White can find me a purchaser, and 
the purchase is completed, I will pay you a commission/ And 
the expression, ‘If you can find a purchaser,’ may be explained 
as meaning, if you can introduce a purchaser to myself, or can 
introduce a purchaser to the premises, or call the premises to the 
notice of the purchaser.” 

The decision of the Commission of Appeals, New York, is 
to the same effect, Lloyd v. Matthews (1872), 51 N.Y. 124. There 
the objection was taken that the seller is entitled to know that the 
party with whom he is dealing is a customer of the broker, if 
such be the fact. In dealing with this objection, Lott, Ch.C., 
said: “The sixth proposition is not correct. It is to be understood, 
in the connection in which it is presented, as declaring that, 
although a party is brought, through the agency and instrumenta- 
lity of the broker, into a negotiation and dealing with the owner, 
which actually results in a sale, yet the broker is not entitled to 
compensation, unless it is made known to the owner that the 
purchaser is his customer. That is not true. It is sufficient 
that the purchaser is in fact such customer.” 

With respect, I think the judgment appealed from should be 
set aside and judgment entered for the plaintiffs for the amount 
of their commission, with costs here and below. 

Latchford, J.: — That the defendant employed the plaintiffs 
to sell the property is found as a fact by the learned trial Judge. 
The finding is amply supported by evidence, though denied upon 
oath by Mr. Galbraith. No limit as to time was imposed when 
authority to find a purchaser was given, nor was that authority 
ever revoked. It is satisfactorily established that the property 



XXVI.] 



ONTARIO LAW REPORTS. 



47 



was brought to the notice of the purchaser by the plaintiffs. 
They sent her a list of houses, which included the defendant’s, 
and took her to examine his house. The proceedings subsequent 
to the introduction of the property to the purchaser were conducted 
without further intervention by the plaintiffs; and the defend- 
ant, when he closed the transaction, was not aware that the pur- 
chaser had been introduced to the property by the only agents 
with whom he had placed it for sale. 

The contract between the defendant and the plaintiffs was 
that he would pay a commission if they would find a purchaser. 
To apply the words of Lord Justice Brett in Wilkinson v. Alston , 
48 L.J. Q.B. 733, they would in point of law fulfil the contract if 
they introduced the property to the notice of the purchaser and 
the latter purchased it in consequence of that introduction, though 
all proceedings subsequent to that introduction were carried on 
between the principals without any further intervention by the 
agents. It would be impossible to find authority more directly 
in point. The case does not appear to have been cited in Locators 
v. Clough, 17 Man. L.R. 659, nor to the trial Judge in this case. 
It was referred to and followed in Sager v. Sheffer, 2 O.W.N. 
671, and is in principle and authority to be preferred to the 
decision of the Manitoba Court. See also Stratton v. Vachon, 
44 S.C.R. 395. 

I think the appeal should be allowed, with costs here and 
below. 



D. C. 
1912 

Rice 

v. 

Galbraith. 

Latchford, J. 



Sutherland, J., concurred. 



Judgment accordingly , 



48 



ONTARIO LAW REPORTS. 



D. C. 
1912 

March 8 



[VOL.. 



[DIVISIONAL COURT.] 

Rich v. Melancthon Board of Health. 

Public Health Act — Services of Physician Employed by Loca:l Board of 

Health — Remuneration — Action for — Mandatory Order — Liability — 

Proper Remedy — Prerogative Writ of Mandamus — Order under Con. 

Rule 1091 — Jurisdiction of County Court — Reasons for Judgment — 

Costs. 

The members of a Local Board of Health are not, under the Public Health 
Act, R.S.O. 1897, ch. 248, constituted a corporation; and the Board as 
a whole is not personally liable nor are the members individually 
liable to be sued for the recovery of a medical claim as a private debt. 
The remedy is to be sought against the Board as a public body, by seek- 
ing the grant of a writ of mandamus requiring the Board to issue an 
order upon the municipality for the amount of the claim. 

Bibby v. Davis (1902), 1 O.W.R. 189, not followed. 

Sellars v. Village of Dutton (1904), 7 O.L.R. 646, and Ross v. Township 
of London (1910-11), 20 O.L.R. 578, 23 O.L.R. 74, followed. 

The writ is the prerogative writ of mandamus ; and the order substituted 
therefor may now be issued by any of the Divisions of the High Court, 
but not by an inferior Court, and is issued upon summary application: 
Con. Rule 1091. 

The mandamus which may be awarded in an action is either in the nature 
of the old equitable mandatory injunction, or is merely ancillary to the 
enforcement of a legal right for which an action may be maintained at 
law. 

Judgment of the County Court of Dufferin affirmed, with a variation as 
to costs. 

Per Boyd, C.: — Reasons for the judgment below should have been given. 

An appeal by the plaintiff from the judgment of the Judge of 
the County Court of the County of Dufferin, dismissing an action 
brought in that Court by a physician to recover $30 for services 
performed under the direction of the Board of Health of the 
Township of Melancthon. The plaintiff sought a personal 
judgment and a mandatory order to enforce it. 

March 5. The appeal was heard by a Divisional Court com- 
posed of Boyd, C., Latchford and Middleton, JJ. 

W. H. Harris, for the plaintiff, argued that the Board of 
Health had been properly sued, and cited Bibby v. Davis (1902) r 
1 O.W.R. 189, and Ross v. Township of London (1910-11), 20 
O.L.R. 578, 23 O.L.R. 74. The plaintiff was the duly appointed 
medical health officer of the Board. He did work on the direction 
of the Board, and should be paid therefor: Public Health Act, 
R.S.O. 1897, ch. 248, sec. 122. 

W. C. Chisholm, K.C., for the defendants, contended that 
the plaintiff was not properly authorised by the Board of Health. 
The plaintiff should have notified the Board before undertaking 



XXVI.] 



ONTARIO LAW REPORTS. 



49 



to do the work himself. Then the Board could have compelled 
the people whose house was cleaned to pay for the disinfection 
thereof. Besides, the plaintiff’s remedy, if any, was by appli- 
cation for mandamus, and not by action. He referred to Ross 
v. Township of London, supra, and the cases there cited. 

Harris, in reply. 

March 8. Boyd, C.: — This is an unfortunate bit of litigation 
for the plaintiff. He is entitled to be paid $30 for his medical 
services, rendered at the instance of the Board of Health, but 
cannot recover it by this method. The miscarriage is not to be 
wondered at, considering the state of the cases and the vague 
and rather embarrassing clauses of the Public Health Act — 
which invite, and are, I understand, about to receive clarifying 
amendments: R.S.O. 1897, ch. 248. 

It is now pretty well settled that the members of the Board 
are not constituted a corporation, though they have been judi- 
cially spoken of as a quasi-corporation; and it is also settled that 
the Board as a whole is not personally liable nor are the component 
members thereof individually liable to be sued for the recovery 
of medical claims as for a private debt. The remedy is to be 
sought against the Board as a public body, if payment cannot 
be otherwise obtained — by seeking the grant of a writ of mandamus 
requiring the Board to issue an order upon the municipality for 
the amount of the claim, in order that payment may be made 
out of the funds applicable thereto. 

The writ is the high prerogative writ, so-called, available in 
cases where there is no right of action for the recovery of the 
claim, and relief is to be sought against a public body who fail 
to perform statutory or other public duties imposed upon that 
body, for the benefit of the applicant. This plaintiff by his 
pleading seeks a personal judgment for the amount, and also 
asks for a mandatory order to enforce it, and for that purpose 
sues the public body under the name of the Board of Health for 
the Township. The personal judgment he cannot get, and for 
this reason he cannot in and by an action get a mandatory order. 
Nor could he, in any circumstances, get the mandatory order of the 
character required from an inferior Court, such as the County 
Court. The prerogative writ of mandamus, which is the appropriate 

4 — XXVI. O.L.R. 



D. C. 
1912 

Rich 

v. 

Melanc- 

THON 

Board of 
Health. 

Boyd, C. 



50 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Rich 

v. 

Melanc- 
thon 
Boabd of 
Health. 

Boyd, C. 



method of relief, can be issued only by the High Court. Orig- 
inally confined to the King’s Bench alone, it may now be issued 
by any of the Divisions of the High Court, as was explained in 
the case reported in 19 P.R. 329, 332, Toronto Public Library 
Board v. City of Toronto (1900). 

The case of Bibby v. Davis, 1 O.W.R. 189, which may have 
misled the plaintiff, is not now to be followed in the light of later 
decisions: Sellars v. Village of Dutton (1904), 7 O.L.R. 646; Ross 
v. Township of London, 20 O.L.R. 578, affirmed in appeal, 23 
O.L.R. 74. See* also, as to the writ, City of Kingston v. Kingston, 
etc., Electric R.W. Co. (1897), 28 O.R. 399, and in appeal (1898), 
25 A.R. 462. 

There is an inherent lack of jurisdiction in the County Court 
to deal with this claim; but the matter was not contested on the 
line above indicated on the appeal before us. We are all in the 
dark as to what took place on the trial below; the only judgment 
given being that the action is dismissed with costs. This curt 
disposal of appealable cases has often been commented upon as 
unfair to the suitors and to the Court of Appeal. When reasons 
are given for the judgment, it enables the dissatisfied litigant to 
judge whether to appeal or not, and these reasons are a 
material assistance to the appellate Court. In brief, when 
reasons for the judgment exist, they should be given; when they 
are not given, it may be that the rule “de non apparentibus 
etc., will excuse. 

The defendants raised an issue disputing the claim which was 
vexatious and did not take the vital point on which we decide; 
so that, while the appeal is disallowed, we think the proper order 
to make is to dismiss both action and appeal without costs. 

This is to be without prejudice to the plaintiff prosecuting 
his claim as he shall be advised — if the municipality does not 
provide means for payment. 

Latchford, J.: — I agree. 

Middleton, J.: — I agree with my Lord the Chancellor, and 
only desire to add to what he has said, for the purpose of ex- 
plaining more at length the reason why I think that an action 
for a mandamus or a mandatory order is not the proper or permis- 



XXVI.] 



ONTARIO LAW REPORTS. 



51 



sible remedy. Some confusion has arisen from a failure to keep 
in mind the historical origin of the present jurisdiction of the High 
Court, and by reason of the term “mandamus” being used to 
indicate several distinct things. 

The Court of Chancery always had jurisdiction to enforce 
certain rights by means of a mandatory injunction, as well as by 
specific performance. Prior to the Common Law Procedure 
Act, the Courts of Law had no such power. 

The Court of King’s Bench, as one of the Crown prerogatives, 
had the right to issue the prerogative writ of mandamus. The 
scope of this writ was very widely different from the mandatory 
order in Equity. 

The Common Law Commissioners of 1834 reported in favour 
of an amendment by which the Courts of Law should be given the 
same jurisdiction as the Court of Equity to restrain the violation 
of legal rights, in cases in which an injunction might issue for 
that purpose from Courts of Equity. Following this, the Common 
Law Procedure Act of 1854 provided that a plaintiff at law 
might claim a writ of mandamus “commanding the defendant 
to fulfil any duty in the fulfilment of which the plaintiff is person- 
ally interested.” This writ was to have the same force and effect 
as the peremptory writ issued out of the Queen’s Bench. This 
statute was subsequently enacted here, and in its present form is 
found as Con. Rules 1081-1083. 

One of the cardinal principles governing the issue of the 
prerogative writ was, that it would never be granted where the 
applicant had some other remedy open to him. After the passing 
of the Common Law Procedure Act, it was suggested that ^the 
power conferred upon that Court to award a mandamus in an 
action practically superseded and rendered obsolete the peremptory 
writ. In The Queen v. Lambourn Valley R.W. Co. (1888), 22 
Q.B.D. 463, it was said by Pollock, B., that “since the passing 
of this Act it cannot be said that the plaintiff has no specific 
remedy to enforce the right which he says has been denied to him;” 
and by Manisty, J. : “In 1854, a remedy which did not exist before 
was given by the Legislature, viz., an action of mandamus, 
which is in fact for a decree ordering the performance of the duty 
which the Court thinks ought to be done, and is a more convenient 
proceeding than by the prerogative writ.” 



D. C. 
1912 

Rice 

V. 

Melanc- 

THON 

Board of 
Health. 

Middleton, J. 



52 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Rich 

v. 

Melanc- 

THON 
Board of 
Health. 

Middleton, J. 



This view of the effect of the statute has not been generally 
accepted; and in Smith v. Chorley District Council, [1897] 1 Q.B. 
532, Kennedy, J., collects the subsequent decisions in which 
it has been commented upon, and adopts as a more accurate 
statement of the law that found in Baxter v. London County Council 
(1890), 63 L.T.R. 767, at p; 771, where Day, J., says: “The true 
and only remedy which the plaintiff has for the purpose of en- 
forcing the rights which I am of opinion he has got, is by a pre- 
rogative writ of mandamus. When I objected that this was a 
matter for mandamus, I was answered that this was an action 
for a mandamus. It is an action for a mandamus based upon the 
Common Law Procedure Act, 1854, and the action for a mandamus 
is simply an attempt to engraft upon the old common law remedy 
a right in the nature of specific performance. When private 
persons had rights one against the other, the Court had power to 
grant a mandamus or direct specific performance, or something 
in the nature of an injunction, to command that the right claimed 
by the one party should be acceded to by the other. But it was 
never contemplated that the action for a mandamus was to super- 
sede the prerogative writ of mandamus. In this case no action 
will lie. I am perfectly clear that this is not an action which will 
lie between the parties, or a case in which a statutable mandamus 
will be applicable, because no action would lie, and a mandamus 
is only granted as ancillary to the action, and for the purpose of 
enforcing the private right in respect of which the private liti- 
gation had arisen. It was never contemplated that a private 
mandamus should be granted in cases in which a prerogative 
mandamus had,, from time whereof memory does not run to 
the contrary, been alone the effective remedy.” 

This is quite in accordance with the view taken in other cases 
by other Judges. In Glossop v. Heston and Isleworth Local Board 
(1879), 12 Ch.D. 102, at p. 122, Brett, L.J., speaking of the man- 
damus referred to in the section of the Judicature Act corres- 
ponding with the Ontario Judicature Act, R.S.O. 1897, ch. 51, 
sec. 58, sub-sec. 9 — which provides that “a mandamus or an 
injunction may be granted ... in all cases in which it shall 
appear to the Court to be just and convenient” — says that the 
case before him “is not brought within the rule that would enable 
the Court of Chancery to grant a mandatory injunction. It is 



XXVI.] 



ONTARIO LAW REPORTS. 



53 



said that, nevertheless, the defendants are liable to a mandamus 
to do their duty. Now, supposing they had neglected or refused 
to do their duty, then I think they would have been liable to a 
mandamus, but not to a mandamus to be granted by the Chancery 
Division. It would have been a prerogative mandamus, as it 
is called, to them as a public body to enter upon and do their 
duty. That, as it seems to me, under the Judicature Act as it 
was before, is a remedy that can be granted only in the Court of 
Queen's Bench. I think the mandamus spoken of in the . . . 

Judicature Act is not the prerogative mandamus, but only a man- 
damus which may be granted to direct the performance of some 
act, of something to be done, which is the result of an action 
where an action will lie.” 



D. C. 
1912 

Rich 

v. 

Melanc- 

THON 

Board of 
Health. 

Middleton, J. 



In the c&se already quoted, Kennedy, J., deals with the series 
of cases in which an action for mandamus had been successfully 
brought against public bodies, by stating that they are all cases 
where there was a debt and “in which the relief by mandamus 
might properly be termed ancillary relief.” 

The cases in our own Courts dealing with the right of a physi- 
cian employed by a Local Board of Health, shew that there is 
no debt. The situation is analogous to that existing in The King 
v. Beeston (1790), 3 T.R. 592, where a mandamus was issued 
against the churchwardens and overseers directing payment 
of a sum payable out of certain parish funds, upon a contract 
which the parish overseers had made under a statutory power — 
the churchwardens not being “technically a corporation; but as 
far as concerns the regulation of the poor of the parish they 
stand in pari rationed Upon the same principle, it is said in 
Mayor, etc., of Salford v. County Council of Lancashire (1890), 
25 Q.B.D. 384, that an action for mandamus would not lie, because 
there was no debt, and the plaintiffs’ only remedy was by the per- 
emptory writ of mandamus. 

Under our practice, the peremptory writ of mandamus having 
been superseded by the simple procedure of Con. Rule 1091, 
the convenience urged in some of the English cases in favour of 
the action of mandamus disappears. Apart from this, the great 
weight of modern authority is in favour of the view I have indicated, 
that the mandamus which may be awarded in an action is either 



54 



ONTARIO LAW REPORTS. 



D. C. 
1912 

Rich 

v. 

Melanc- 

THON 

Board of 
Health. 

Middleton, J. 



[VOL. 



in the nature of the old equitable mandatory injunction, or is 
merely ancillary to the enforcement of a legal right for which 
an action might be maintained at law. 

It should also be borne in mind that the County Court has no 
jurisdiction to grant a peremptory writ. While the Con. Rules 
govern the practice and procedure in County Court actions, 
they do not confer any jurisdiction upon the County Court. The 
jurisdiction of the County Court must be sought in the County 
Courts Act; and, while the County Court has jurisdiction in 
actions for equitable relief, where the subject-matter does not 
exceed $500, and while it has “as regards all causes of action 
within its jurisdiction . . . power to grant . . . such 
relief, redress or remedy . . .by the same mode of pro- 
cedure, and in as full and ample a manner as might and ought 
to be done in the like case before the High Court/’* it has not 
the right to entertain an application for the old prerogative writ, 
this being vested in the High Court only. 

Action and appeal dismissed without costs. 



*County Courts Act, 10 Edw. VII. ch. 30, sec. 28. 



XXVI.] 



ONTARIO LAW REPORTS. 



55 



[DIVISIONAL COURT.] 

Wadsworth v. Canadian Railway Accident Insurance Co. 

Accident Insurance — Death Claim — Cause of Death — Construction of Poli- 
cies — ■“ Caused by the Burning of a Building” — “ Injuries Happening 
from Fits” — Efficient Cause — Quantum of Indemnity. 

W., who was insured by the defendants under two policies of accident in- 
surance, entered a wooden building at night, with a lighted lantern; 
while there he had a fit, and in the fit dropped or knocked over the 
lantern; the lantern exploded or was broken, the oil escaped from it, 
and a flame arose, which enveloped the deceased, and inflicted injuries 
from which he died: — - 

Held, that the injuries were not “caused by the burning of a building,” 
within the meaning of a double indemnity clause in the policies. 

And held (Latchford, J., dissenting), that the case was not one of “in- 
juries happening from any of the following causes . . .” — one of 

the causes specified being “fits” — within the meaning of a clause in the 
policies limiting the amount payable in such cases to one-tenth of the 
amount of the single indemnity. The fit was not the efficient cause of 
the death. The injuries “happened” not from the fit but from the fire. 
The cause of an efficient cause is not itself an efficient cause or causa 
causans. 

Review of the authorities. 

Judgment of Middleton, J., varied. 

Appeal by the plaintiff from the judgment of Middleton, 
J., who tried the action without a jury at Ottawa, in so far as 
the judgment was against the plaintiff. 

The action was brought to recover the amounts due under 
two policies of accident insurance issued by the defendants to 
John Allen James Wadsworth in favour of his wife, the plaintiff. 

The two policies were in the same form. The insurance 
was stated to be “ against bodily injuries caused solely by ex- 
ternal, violent, and accidental means// as specified in a schedule, 
and “ against disability from sickness.” The principal sum of 
each policy was stated to be, in the first year $5,000, with 5 per 
cent, increase annually for ten years, amounting to $7,500. 
Under “ Schedule of Indemnities,” it was stated in “Part A” 
that, “if any of the following disabilities shall result from such 
injuries alone, within ninety days from the date of accident, the 
company will pay in lieu of any other indemnity ... for 
loss of life, the principal sum.” For loss of both hands, loss of 
entire sight, etc., the principal sum was also payable. “Part 
C,” headed “Double Payments,” stated: “If such injuries are 
sustained while riding as a passenger ... or are caused 
by the burning of a building in which the insured is therein (sic) 



D.C. 

1912 

March 9. 



56 



ONTARIO LAW REPORTS. 



D.C. 

1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 



[vol. 

at the commencement of the fire, the amount to be paid shall 
be double the sum specified in clause under which the same 
arises.” “Part G: In case of injuries happening from any of 
the following causes . . . fits, vertigo, sleep-walking, duel- 
ling . . . causing . . . the company will pay one-tenth 

of the amount payable for bodily injuries as stated in Part A. 

. ” “Part H: In case of the happening of injuries men- 
tioned in special indemnity clauses D, E, F, and G, claims shall 
be made only under said clauses, and the amount to be paid 
under said clauses shall be the full limit of the company’s liability, 
and such claim shall not be entitled to double benefit as provided 
in Part C.” 

The policies were dated respectively the 24th December, 1907, 
and the 30th July, 1909, and all the premiums were paid by 
Wadsworth until his death on the 24th, October, 1910. 

The plaintiff alleged that the case came within “Part C,” 
death being “caused by the burning of a building in which the 
insured is ... at the commencement of the fire,” and 
claimed $11,000 and $10,500 under the policies respectively. 
The defendants tendered $1,075, which was refused. The de- 
fendants took the position that “Part G” and “Part H” applied, 
and that the utmost to which the plaintiff was entitled was $550 
under one policy and $525 under the other. 

The trial Judge found that the death of the assured resulted 
from a fit, which caused the upsetting of a lantern, whereby the 
building in which the assured was was set on fire, and the 
assured received the injuries from which he died; and the 
judgment at the trial in favour of the plaintiff was, therefore, 
limited to the two sums of $550 and $525; and the plaintiff 
appealed. 

November 1, 1911. The appeal was heard by a Divisional 
Court composed of Falconbridge, C.J.K.B., Riddell and 
Latchford, JJ. 

R. V. Sinclair, K.C., and H. Aylen, K.C., for the plaintiff, 
argued that the evidence did not justify the findings of the learned 
trial Judge, that the death of the deceased was caused by a fit, 
and that he was subject to the form of epilepsy known as petit 
mat. The latter finding was based on the evidence of a medical 
witness, and was a mere inference from a previous attack, which 



XXVI.] 



ONTARIO LAW REPORTS. 



57 



the Judge found to have been a faint. Probably the deceased D - c - 
~ 1912 

became unconscious owing to his weak condition, and the lantern 

exploded, the result being that the building was set on fire, and Wadsworth 
the insured suffered the injuries which were the cause of his death. Canadian 
Even if the deceased did have a fit, that was not the efficient Accidbot 
cause of his death. As regards the double liability clause, they Insurance 
argued that the injuries were “ caused by the burning of a build- 
ing/’ within the meaning of the policy, and that it was not neces- 
sary that the building should have been wholly burned, in order 
to sustain the plaintiff’s claim. The following cases were re- 
ferred to: Lawrence v. Accidental Insurance Co. (1881), 7 Q.B.D. 

216; Winspear v. Accident Insurance Co. (1880), 6 Q.B.D. 42; 

Wicks v. Dowell & Co. Limited , [1905] 2 K.B. 225; Clover Clayton 
& Co. Limited v. Hughes, [1910] A.C. 242; Canadian Casualty 
and Boiler Insurance Co. v. Boulter, Canadian Casualty and Boiler 
Insurance Co. v. Hawthorne (1907), 39 S.C.R. 558; Mardorf v. 

Accident Insurance Co., [1903] 1 K.B. 584; In re Etherington 
and Lancashire and Yorkshire Accident Insurance Co., [1909] 

1 K.B. 591; Reynolds v. Accidental Insurance Co. (1870), 22 
L.T.N.S. 820; Houlihan v. Preferred Accident Insurance Co. of 
New York (1908), 145 N.Y. St. Repr. 1048; Manufacturers’ Acci- 
dent Indemnity Co. v. Dorgan (1893), 58 Fed. Repr. 945, especially 
at pp. 954, 955, where the English cases are considered. 

I. F. Hellmuth, K.C., and J. G. Gibson, for the defendants, 
argued that, as to the question of fact, the finding of the learned 
trial Judge that the injuries sustained by the insured, causing 
his death, happened from “fits,” within the meaning of the policy, 
was fully warranted by the evidence, and should not be dis- 
turbed. As regards the construction of the policy, it was sub- 
mitted that “Part G” was not a clause exempting the defendants 
from liability in certain cases, but was one of several clauses 
fixing their liability at different sums according to the different 
risks, so the cases cited by the appellant, all of which deal with 
exceptions or exemptions from liability, had no application to 
the case at bar. 

Sinclair, in reply. 

March 9, 1912. Falconbridge, C.J.:— After long and careful 
consideration, in the course of which I have many times perused 
the numerous authorities cited (citations from which appear in 



58 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Falconbridge, 

C.J. 



my brother Riddell’s judgment), I have come to the conclusion 
(with great respect and after much hesitation) that I do not 
agree with the judgment appealed from, and think that it ought 
to be reversed. 

“Part G” of the policy which has to be construed is as follows: 
“In case of injuries happening from any of the following causes, 
viz., intentional injuries inflicted by the insured or any other 
person (other than burglars or robbers) fits . . sleep- 
walking . . . causing death, loss of sight or limb . .. . the 

company will pay one-tenth of the amount payable . . . ” 

It is by no means easy to construe; and, as my brother Middle- 
ton says, in none of the cases is there any attempt to construe 
such a clause. 



I do not know whether there is any light shed on the subject 
by consulting the dictionaries as to the meaning of the verb “to 
happen” (same root as “capio”). The Imperial defines it: “1. 
To come by chance; to come without one’s previous expectation; 
to fall out. . . . 2. To come; to befall.” Murray (Oxford 

Dictionary) says: “To come to pass (originally by ‘hap’ or 
chance); to take place; to occur, betide, befall. The most 
general verb to express the simple occurrence of an event, often 
with little or no implication of chance or absence of design.” 
While the clause does not aim to destroy absolutely the 
liability of the company, yet its language is intended to limit 
that liability to a fractional amount of the sum payable under 
other circumstances, and so it ought to be construed strongly 
against the company. The insurer accepts the policy with the 
view and for the purpose of covering all accidents which may 
(“happen” to him. In In re Etherington and Lancashire and 
Yorkshire Accident Insurance Co., [1909] 1 K.B. 591, Vaughan 
Williams, L.J., says, at p. 596: “I start with the consideration 
that it has been established by the authorities that in dealing 
with the construction of policies, whether they be life, or fire, 
or marine policies, an ambiguous clause must be construed against 
rather than in favour of the company.” Farwell, L.J., at p. 
600, expresses the same view. 

The cases of Winspear v. Accident Insurance Co., 6 Q.B.D. 
42, and Lawrence v. Accidental Insurance Co., 7 Q.B.D. 216 
followed in the United States in Manufacturers’ Accident In- 



XXVI.] 



ONTARIO LAW REPORTS. 



59 



demnity Co. v. Dorgan, 58 Fed. Repr. 945, would be absolutely 
in point if in the Lawrence case the fit had started the train which 
passed over the deceased, and in the Winspear case the fit had 
set loose the flow of water which drowned the insured. But, 
on a consideration of the numerous cases on the subject of proxi- 
mate cause and causa sine qud non — e.g., the illustration that 
the birth of the insured was a cause of the accident, inasmuch 
if he had never been born the accident could not have happened — 
I have arrived at the conclusion that, notwithstanding the finding 
of the trial Judge, which we are bound to accept, that it was 
the fit that caused the upsetting of the lantern and the subse- 
quent fire, the injuries “ happened” not from the fit but from 
the fire. 

Therefore, I agree with my brother Riddell in thinking that 
the appeal should be allowed in part, and judgment entered for 
the plaintiff for $10,750 ana interest from the teste of the writ; 
the plaintiff to have costs of the trial; no costs of appeal to either 
party. 

Riddell, J.: — This is an appeal from the judgment at the 
trial by Mr. Justice Middleton, without a jury, at Ottawa, June, 
1911. John Allen James Waasworth, a man of some means, 
living in Ottawa, procured from the defendants two policies of 
accident insurance of date the 24th December, 1907, and the 
30th July, 1909, respectively, in favour of his wife, the plaintiff. 
The material part of the policies — they are in the same form — 
is here subjoined: — 

“The Canadian Railway Accident Insurance Company, 
Ottawa, Can., in consideration of the statements, agreements 

. in the application and of the annual premium of 

payable does hereby insure 

John Allen James Wadsworth . . . against bodily injuries 

caused solely by external, violent and accidental means, as speci- 
fied in the following schedule (subject, however, to the terms and 
conditions hereinafter contained), and against disability from 
sickness, as follows: — 

“This policy may be renewed from year to year upon pay- 
ment of the annual premium, payable as aforesaid in each year 
during the continuance in force thereof, and the payment of 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Falconbridge, 

C.J. 



60 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell, J. 



each consecutive full year’s renewal premium of this policy shall 
add five per cent, to the principal sum of the first year until 
such additions shall amount to fifty per cent., and thenceforth 
so long as this policy is maintained in force the insurance shall 
be for the original sum plus the accumulation of fifty per cent., 
as aforesaid. 

“The principal sum of this policy in the first year is $5,000; 
with five per cent, increase annually for ten years will amount 
to $7,500. 

“SCHEDULE OF INDEMNITIES. 

“Part A. — If any of the following disabilities shall result from 
such injuries alone, within ninety days from the date of accident, 
the company will pay in lieu of any other indemnity: 

In One Payment 

For Loss of Life the principal sum 

For Loss of Both Hands by severance at or 

above the wrist the principal sum 

For Loss of Both Feet by severance at or 

above the ankle the principal sum 

For Loss of One Hand at or above the 
wrist, and One Foot at or above the 

ankle the principal sum 

For Loss of Entire Sight of Both Eyes, if 

irrecoverably lost the principal sum 

For Loss of Either Hand by severance at or 

above the wrist of “ “ 

For Loss of Either Foot by severance at or 

above the ankle of “ “ 

For Loss of Entire Sight of One Eye, if 

irrecoverably lost 1 / 3 of “ “ 

“The payment of one principal sum in any case shall end this 

policy. 



“DOUBLE PAYMENTS. 

“Part C. — If such injuries are sustained while riding as a 
passenger in any passenger steamship or steamboat, or in any 
steam, cable or electric passenger railway conveyance, or in a 



XXVI.] 



ONTARIO LAW REPORTS. 



61 



passenger elevator, or are caused by the burning of a building in 
which the insured is therein at the commencement of the fire , the 
amount to be paid shall be double the sum specified in clause 
under which the claim arises. 

“Part G. — In case of injuries happening from any of the follow- 
ing causes, viz., intentional injuries inflicted by the insured or 
any other person (other than burglars or robbers), fits, vertigo, 
sleep-walking, duelling, war or riot, exposure to unnecessary 
danger, engaging in bicycle, automobile or horse racing, or while 
under the influence of intoxicating liquors or narcotics, causing 
death, loss of sight or limb as stated in Part A, the company will 
pay One-Tenth of the amount payable for bodily injuries as stated 
in Part A, under which claim arises; or, if such injuries result 
in total or partial disability as provided in Part B, the company 
will pay One-Tenth of the amount payable for weekly indemnity 
as stated in said Part B, under which claim arises. 

“Part H. — In case of the happening of injuries mentioned 
in special indemnity clauses D, E, F and G, claims shall be made 
only under said clauses, and the amount. to be paid under said 
clauses shall be the full limit of the company’s liability, and such 
claim will not be entitled to double benefit as provided in Part C.” 
(The italics are mine). 

Wadsworth paid all premiums due until his death on the 
24th October, 1910, under circumstances which will be set out 
later in this judgment. The widow claimed that the case came 
within Part C, as being “caused by the burning of a building 
in which the insured is therein (sic) at the commencement of the 
fire,” and claimed $11,000 and $10,500 under the policies respec- 
tively; the company tendered $1,075, which was refused. The 
position taken by the company was, that Parts G and H applied, 
and that the whole amount (if anything) to which the plaintiff 
was entitled was $550 under the one policy and $525 under the 
other. 

On action brought, the defendants pleaded that Wadsworth 
had in the application represented that he had never had and 
was not subject to fits, or disorder of the brain, or any bodily 
or mental infirmity, which the company alleged was untrue, as 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell, J. 



62 ONTARIO LAW REPORTS. [vol. 

he had had and was subject to fits or vertigo; and these mis- 
statements were material. 

At the trial, it was decided, on satisfactory evidence, that 
the only instance of illness or anything which could be considered 
as coming under the description did not take place till long after 
Insurance the issue of the policies; and there is nothing to indicate that 

vO. 

there was any misrepresentation. The other defence the learned 

Ridden, j. trial Judge gave effect to; and this forms the subject of the 
present appeal. 

The facts surrounding the death of the insured are not com- 
plicated. In October, 1910, the insured went, with other mem- 
bers of a hunting club, to their club-house in the township of 
Hincks. On the 23rd October, some of the members of the club 
were out all day hunting; and, when they came in comparatively 
late and after * supper-time, Wadsworth, who does not seem to 
have been out that day in the afternoon, said he was not feeling 
well and did not feel like eating — he did not have any supper 
and went and lay down upstairs. About 8.20 or 8.30 he came 
downstairs, declined an offer of something to eat, and asked the 
chore boy to open a bottle which he had. This the boy did; 
and the deceased, dissolving a tablet in some fluid out of this 
bottle, drank the solution. He then left the room and went 
outside. A dog was heard barking shortly after; and, when 
the boy went out to investigate, he noticed the water-closet on 
fire. The alarm was raised, and a number of persons ran to 
the burning building with water; after the fire was extinguished 
at least in part, the deceased was found sitting at one end of 
the building and on the opening of the seat of the closet, or 
perhaps the boards of the seat, leaning back against the well, 
his trousers not lowered. He was taken out moaning, apparently 
in pain, carried limp as he was to the club-house and put on 
a table. He was found to be rather badly burnt about the feet, 
up the back of the buttocks, and around the face and head; 
also a patch on the chest and on the shoulders. 

He received treatment from a medical man who was one of 
his club-mates, and was shortly thereafter removed to Ottawa 
and placed in the Carleton General Hospital, where he died the 
next day, of shock. 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 



XXVI.] 



ONTARIO LAW REPORTS. 



63 



The closet was a small building, some 4^ or 5 feet long and 
about as much in depth, with no front but with wooden sides and 
back, and with two holes in the seat. 

Next day, the boy found in the bottom ( i.e ., as we are inform- 
ed, the pit) the side of an ordinary stable lantern, such as was in 
use at the club for going out with; and, while Wadsworth had 
not taken a lantern out with him, so far as the witness could 
say, there was one noticed missing next day. It seems fairly 
clear that Wadsworth took the lantern with him to light him 
to the closet, it being quite dark when he went out, and it being 
usual to take a lantern on such occasions. 

The building was not burnt, not even badly scorched, and 
there was no smell of oil on the day after the accident, when 
Labelle found the lantern; no considerable part of the lantern 
seems to have been found except the “side” which was found in 
the pit — the globe was not found, but one witness saw, on the 
night of the casualty, broken glass, the shape of a globe, lying 
on the platform or floor of the closet opposite one of the seats. 
We are told that this was at the opposite end of the closet from 
where Wadsworth was found, but I do not find this made clear 
upon the evidence, and I cannot say that it is material one way 
or the other. 

In July of the same year, Wadsworth, at the same club- 
house, after dinner, “seemed to faint away;” it was very warm, 
but he did not seem to be suffering from the effects of the heat. 

The medical man who attended him at the club gave a cer- 
tificate on the 29th October, saying, amongst other things: “I 
can only account for his getting burned by believing that he 
must have taken a fit or fainted and in so doing upset the lantern, 
thus setting himself on fire. Everything in connection with the 
burning seems to indicate this.” 

From the evidence of this medical man and another called at 
the trial, my brother Middleton came to the conclusion that the 
unfortunate man “took a fit when he ‘was in the closet, and 
that, while in that fit, he either dropped or knocked over the 
lantern, the lantern exploded or was spilled or was broken by 
the fall, the result was that the oil escaped, and there was almost 
immediately a very extensive flame, which enveloped him and 
inflicted the very severe injuries from which he died.” And 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell, J. 



64 



ONTARIO LAW REPORTS. [vol. 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell, J. 



the deceased was affected with a “malady . . . known 

as minor epilepsy or petit mat” 

I think my learned brother’s conclusion amply sustained by 
the evidence; and I have arrived at the same conclusion from 
an independent consideration of the facts as proved. 

It seems to me also clear that the injuries were not “caused 
by the burning of a building” at all. 

What is said about the building is, indeed, that it was on 
fire, not very badly scorched; the cook told others of the fire; 
that the closet was on fire; but, as one of the witnesses threw 
a pail of water upon the roof, it may perhaps be inferred that 
the building did burn — that it was a “burning building” within 
the meaning of the policy — as in law ( Regina v. Parker (1839), 
9 C. & P. 45, per Parke, B.), it is sufficient that it be scorched 
and charred in a trifling way. 

But the condition of Part C is not that the injuries be sus- 
tained while in a burning building; the language is not the same 
as in the former part of Part C,” “sustained while riding . . . 

in any .... steamboat . . . railway conveyance 

.” — the words are not “sustained while in a burning 
building,” but “caused by the burning of a building.” We are 
referred to Houlihan v. Preferred Accident Insurance Co. of New 
York, 145 N.Y. St. Repr. 1048, as deciding that the two expres- 
sions are synonymous. In that case the leading judgment by 
Clarke, J. (in which all but one of the other Judges concurred, 
and he agreed in the result), says (p. 1050): “It must be that 
what was attempted to be guarded against was injury in the 
insured resulting from fire while in a building.” In this con- 
clusion I am unable to agree — the words “caused by the burning 
of a building” have a clear and unambiguous meaning, and a 
meaning distinctly differing from that of the words employed 
by the learned New York Judge. Nor, in my view, does the 
case of Northrup v. Railway Passenger Assurance Co. (1871), 
43 N.Y. 516, cited as supporting the conclusion, assist, even if 
it be well decided — that being simply a decision that, where a 
passenger had to walk from a railway station to a steamboat 
landing, 70 rods distant, she did not cease to be “travelling 
by . public conveyance provided for the transportation 

of passengers.” 



XXVI.] 



ONTARIO LAW REPORTS. 



65 



But, if we were to give full authoritative weight to the Houlihan 
case, I do not think that, even then, the plaintiff would have 
made out her case. There the bedclothes and mattresses of the 
bed upon which the deceased slept were burned, her night clothes 
were burned from her and other circumstances shewed that it 
was the burning of permanent or quasi-permanent furnishing 
and contents df the room which set fire to her — it was not, a$ 
in this case, the blazing up and burning of oil brought by the 
deceased into the room for a purely temporary purpose. What- 
ever may be the law in the case of the burning being caused by 
the ignition of permanent or quasi-permanent contents of a room, 
I venture to think that no stretch of language can reasonably 
make injuries caused by the burning of oil which is brought into 
the room by the insured for a temporary personal purpose only 
come within the meaning of the words “ caused by the burning 
of a building.” 

This claim of the plaintiff is, in my view, not well founded. 

Then, as to the application of Parts G and H. The meaning 
of G, so far as affects the present case, is: “In case of injuries 
which happen from fits or vertigo, and which injuries cause 
death, the company will pay one-tenth of the amount stated in 
Part A” — the participle “causing,” in the third line, being in the 
same grammatical relation as the participle “happening” in the 
first line. The clause does not mean, “In case of injuries which 
happen from fits or vertigo, which fits or vertigo cause or causes 
death,” etc., etc. 

The only question then is, whether the injuries happened 
from fits or vertigo, because they undoubtedly did cause death. 

In considering this question, we must look at the case from 
a common sense, business point of view, avoiding metaphysical 
subtlety; ever having in mind that such agreements, being in 
the language selected by the company, should, where there is 
a real ambiguity, be construed most strongly against the company, 
we are not, by too refined or unnatural an interpretation of the 
language employed, to conjure up an ambiguity where none 
really exists. 

“It is only a fair rule . . . which Courts have adopted 

to resolve any doubt or ambiguity in favour of the insured and 
against the insurer:” Manufacturers’ Accident Indemnity Co. v. 

5 — XXVI. O.L.E. 



D. C. 

19] 2 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell, J. 



66 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell, J. 



Dorgan, 58 Fed. Itepr. 945, at p. 956, per Taft, J. (now President 
Taft) ; but it would Pot be a fair rule to invent or imagine doubt 
or ambiguity where none can be found. 

In view of the law as laid down by the decisions, I do not 
think, however, that there can be said to be any ambiguity or 
doubt. 

The injuries which caused the death are the burns — did these 
happen from fits or vertigo? 



I do not lay any stress whatever on the use of the plural 
“fits” — nor do I think that if the cause were an epileptic fit, 
the plaintiff could recover because the plural is used in the policy 
instead of the singular. “Fits” is colloquially the same as “fit:” 
cf. Murray, New English Diet., sub voc. “Fit,” pp. 262 ad fin., 
263 ad. init. c, d. Also in the English cases of epilepsy, which 
will be cited, the words “fits” is used in the policy, but the in- 
sured had only the one fit — indeed, in case at least of death, it 
would scarcely appear that more than one fit was to be con- 
sidered; The burns were caused primarily and immediately by 
the fire — the fire was the proximate cause. In philosophy it is 
said “ causa causae causantis , causa causans ipsa ” — and if, in 
law, the cause of the proximate cause were itself an efficient 
cause, there would be no difficulty in the present case. No 
doubt, the fire was caused by the fits and vertigo. Does that 
make these an efficient cause? 



Two recent cases in England are strongly pressed upon us. 
In W inspear v. Accident Insurance Co., 6 Q.B.D. 42, the policy 
did not extend to “any injury caused by or arising from natural 
disease or weakness or exhaustion consequent upon disease.” 
W., being the insured, was overtaken by an epileptic fit when 
fording a shallow stream; he fell down in the stream and was 
drowned. It was argued that “it was the fit which caused the 
drowning, for even after the insured had fallen into the stream 
he could have got his head out of the water but for the fit.” The 
Court of Appeal (Lord Coleridge, C.J., Baggallay and Brett, 
L.JJ.), however, held that the insurance company was liable, 
and that the death was not caused by any natural disease or 
weakness, but by the accident of drowning — that “those words 
in the proviso . . . point to an injury caused by natural 

disease, as if, for instance, in the present case, epilepsis had 



XXVI. ] 



ONTARIO LAW REPORTS. 



67 



really been the cause of death.” There are two points of dis- 
tinction between the Winspear case and ours: (1) there the 

cause of death was being considered; in ours, the cause of the 
happening of injuries; (2) there the epilepsy was not the cause 
of the presence of the water which drowned; here, the epilepsy 
was in a sense the cause of the fire which burned. 

The Winspear case is referred to and followed in an American 
case, Manufacturers’ Accident Indemnity Co. v. Dorgan, 58 Fed. 
Repr. 945, in which an elaborate and careful judgment is given 
by the present President of the United States, then Mr. Justice 
Taft. The deceased had been “ overtaken by some temporary 
trouble, ’ ’ which caused him to fall into a brook, upon whose 
banks he was at the time; he was drowned. The insurance 
company was held liable, although the policy provided that they 
should not be liable for “ accidental injuries or death resulting 
from or caused, directly or indirectly, wholly or in part, by or 
in consequence of fits, vertigo,” etc., etc., “nor to any cause 
excepting where the injury is the sole cause of the disability 
or death.” This case goes no further than the Winspear case. 

The other English case most strongly relied upon is Lawrence 
v. Accidental Insurance Co., 7 Q.B.D. 216. The policy did not 
insure in case of death arising from fits. The insured, standing 
at a railway station, was seized by a fit and fell forward off the 
platform when a train was passing— this went over his body and 
killed him. It was argued for the company that “the accident 
actually arose from the disease” (p. 218), but the Court, Den- 
man, J., held them liable. He says (p. 219): “Now, the imme- 
diate cause of death is not in the least disputable, but there is 
no doubt that if he had not fallen there in consequence of the 
fit he would not have suffered death, and in that sense the fit 
led to his death. The question is whether that was merely one 
of several events which brought about the accident, in the sense 
that it caused the accident to happen by causing him to be there, 
or whether it was, within the meaning of this proviso, a cause 
of death which would prevent the policy applying to the case.” 
In other words, was the fit a causa causans or a mere causa sine 
qua (so-called) or condition? Watkin Williams, J., agreed. 
Quoting Lord Bacon’s Maxims of the Law, Reg. 1— “It were 
infinite for the law to consider the causes of causes, and their 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell, J. 



68 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell, J. 



impulsions one of another; therefore it contenteth itself with 
the immediate cause” — he says: “According to the true principle 
of law, we must look at only the immediate and proximate cause 
of death, and it seems to me to be impracticable to go back to 
cause upon cause, which would lead us back ultimately to the 
birth of the person, for if he had never been bom the accident 
would not have happened. The true meaning of this proviso 
is that if the death arose from a fit, then the company are not 
liable, even though accidental injury contributed to the death 
in the sense that they were both causes. . . .It is essential 

to that construction that it should be made out that the fit was 
a cause in the sense of being the proximate and immediate cause 
of the death, before the company are exonerated, and it is not 
the less so, because you can shew that another cause intervened 
and assisted in the causation.” 



The same remarks apply to this as to the case in 6 Q.B.D. — 
the fit did not cause the train to come along — it was not the cause 
itself of the causa proximo. 

To the same effect are the remarks of Collins, M.R., in Wicks 
v. Dowell & Co., [1905] 2 K.B. 225, at p. 228, which case does 
not assist — nor am I able to derive any assistance from Mar dor f 
v. Accident Insurance Co., [1903] 1 K.B. 584. 

If, in the case in 6 Q.B.D., the falling of the insured had let 
in the water which drowned him — or, in the case in 7 Q.B.D., 
the falling had automatically brought on the engine, the cases 
would be parallel with the present — but that is not the case; 
and, as a consequence, these cases are not conclusive. 

But there are cases in which the proximate cause is not accom- 
panied by another cause ( causa sine qua non), but has been 
actually caused itself by another cause, and it has been held 
that this last-named cause is not to be considered as the causa 
causans — to use Lord Bacon’s terminology, we are not to look 
to the causes of causes. 

In Busk v. Royal Exchange Assurance Co. (1818), 2 B. & Aid. 
73, the servants of the assured negligently lighted a fire in the 
insured ship, whereby she was burned. The case was elaborately 
argued by Campbell and Bosanquet. Bayley, J., says, giving 
the judgment of the Court (p. 80): “In our law at least, there 
is no authority which says that the underwriters are not liable 



XXVI. ] 



ONTARIO LAW REPORTS. 



69 



for a loss, the proximate cause of which is one of the enumerated 
risks, but the remote cause of which may be traced to the mis- 
conduct of the master and mariners.’ ’ The very learned Judge 

refers to many authorities also in foreign laws, and holds “that 
the assured are entitled to recover, as for a loss by fire, although 
that fire was produced by the negligence of the person having 
the charge of the ship at the time.” 

Walker v. Maitland (1821), 5 B. & Aid. 171, at p. 175, Bishop 
v. Pentland (1827), 7 B. & C. 219, at p. 223, Phillips v.Nairne 
(1847), 4 C.B. 343, at pp. 350, 351, Patapsco Insurance Co. v. 
Coulter (1830), 3 Peters (S.C.) 222, at p. 233, Columbia Insurance 
Co. v. Lawrence (1836), 10 Peters (S.C.) 507, at p. 517, General 
Mutual Insurance Co. v. Sherwood (1852), 14 How. S.C. 351, at 
p. 366, may also be looked at upon the general principle, but 
must be read with caution, as they have not the so-called remote 
cause, always the cause itself of that which is proximate. 

A nice distinction is indicated by Story, J., giving the judg- 
ment of the Supreme Court of the United States, in Waters v. 
Merchants’ Louisville Insurance Co. (1837), 11 Peters (S.C.) 213. 
In that case, barratry not being insured against, the Circuit 
Court divided in opinion, and the Supreme Court was asked, 
amongst other things: (1) Does the policy cover a loss of the 
boat by a fire, caused by the barratry of the master and crew? 
(2) Does the policy cover a loss of the boat by fire, caused by 
the negligence, carelessness, or unskilfulness of the master and 
crew of the boat, or any of them? The learned Judge says (p. 
219), upon the first question: “It assumes that the fire was 
directly and immediately caused by the barratry of the master 
and crew, as the efficient agents. ... In this view of it, 
we have no hesitation to say, that . . . such a loss is properly 

a loss attributable to the barratry, as its proximate cause, as it 
concurs as the efficient agent, with the element, eo instanti, when 
the injpry is produced.” But, as to the second question, it was 
held that the negligence could be only causa remota. 

In our own Courts the case Canadian Casualty and Boiler 
Insurance Co. v. Boulter, Canadian Casualty and Boiler Insurance 
Co. v. Hawthorne, 39 S.C. R. 558, and in the Court below, Haw- 
thorne v. Canadian Casualty and Boiler Insurance Co., Boulter 
v. The Same (1907), 14 O.L.R. 166, are in point. There the 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell, J. 



70 ONTARIO LAW REPORTS. [vol. 

policies contained a clause that they did not cover loss or damage 
resulting from freezing. A pipe connected with the sprinkler- 
tank system burst from freezing, and the water ran down upon 
and injured the stock. The trial Judge, the Chief Justice of 
the King’s Bench, gave judgment for the insured, and this was 
sustained by the Court of Appeal and the Supreme Court — one 
Judge dissenting in each Court. The Chief Justice of the King’s 
Bench does, indeed, suggest that the freezing was the cause of 
the injury, though not of the damage; but that must be read 
in connection with the facts of the case. It would appear also 
that the use of the word “ immediate” had some influence on 
the Supreme Court. But, taking the case as a whole, I think it 
is authority for saying that the cause of an efficient cause is not 
itself an efficient cause or causa causans. 

I think the appeal should be allowed in part, and judgment 
entered for the plaintiff for $10,750 and interest from the teste 
of the writ. The plaintiff should also have the costs of the trial; 
success being divided, there should be no costs of the appeal. 

The following have a more or less indirect bearing upon the 
matters discussed: Trew v. Railway Passengers Assurance Co. 
(1860), 5H.&N. 211; S.C. (1861), 7 Jur. N.S. 878 (Cam. Scacc.); 
Reynolds v. Accidental Insurance Co., 22 L.T.N.S. 820; In re 
Etherington and Lancashire and Yorkshire Accident Insurance Co., 
[1909] 1 K.B. 591; Clover Clayton & Co. Limited v. Hughes, 
[1910] A.C. 242; Dudgeon v. Pembroke (1877), 2 App. Cas. 284; 
Accident Insurance Co. v. Crandal (1887), 120 U.S. 527; Canadian 
Railway Accident Insurance Co. v. Haines (1911), 44 S.C.R. 386. 

Latchford, J. : — I think the finding of the learned trial Judge, 
that the accident to the deceased happened because of a fit, 
is amply warranted by the evidence. 

It is urged, however, that the death of Wadsworth resulted 
from burns, and not from fits; and that, therefore, Part G should 
not have been considered in determining the amount payable 
by the defendants. 

The insurance is expressed to be “against bodily injuries 
caused solely by external, violent, and accidental means,” as 
specified in a schedule. 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell, J. 



XXVI.] 



ONTARIO LAW REPORTS. 



71 



In the first part of the schedule, under the heading “ Schedule 
of Indemnities,” it is provided — “Part A” — that, “if any of the 
following disabilities shall result from such injuries alone, within 
ninety days from the date of accident, the company will pay, 
in lieu of any other indemnity, for loss of life . . . hands 

. . . . feet . . . entire sight of both eyes . . . the 

principal sum.” This sum is $5,000 under each of the two 
policies sued on, with an annual increase at the rate of five per 
cent. 

Loss of life is thus defined as “a disability r” 

A disability, to form the basis of any claim against the com- 
pany, “ shall result from . . . bodily injuries . . . caused 

solely by external, violent, and accidental means.” 

The foundation of the plaintiff’s action is, that her husband’s 
death resulted from or was caused by injuries which were them- 
selves caused by specified means. Mrs. Wadsworth was obliged 
to establish and did establish that external, violent, and acci- 
dental means caused injuries to her husband, and that injuries 
caused by such means caused his death. 

So much it seems to me necessary to premise before coming 
to the consideration of the particular provisions of the contract 
around which the parties are contending. 

The defendants allege and the plaintiff denies that Part G 
of the schedule affects, in the circumstances of the case, the amount 
to which Mrs. Wadsworth is entitled. If it does apply, the 
appeal fails; and the question whether it applies or not is, upon 
the facts as found, merely one of construction. 

Part G has on principle to be construed upon a consideration 
of the whole contract. A policy of insurance is, in the words 
of Lord Ellenborough in Robertson v. French (1803), 4 East 130, 
at pp. 135, 136, “to be construed, according to its sense and 
meaning, as collected in the first place from the terms used in 
it, which terms are themselves to be understood in their plain, 
ordinary, and popular sense, unless . . . the context evi- 

dently points out that they must in the particular instance, 
and in order to effectuate the immediate intention of the parties 
to that contract, be understood in some other special and peculiar 
sense.” 

The main object and intent of the contract may be regarded 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Latchford, J. 



72 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Latchford, J. 



as limiting any general words used having in view that object 
and intent: Lord Herschell, L.C., in Glynn v. Margetson & Co., 
[1893] A.C. 351, at p. 355. 

Part G cannot in any way be considered as in derogation of 
the object and intent of the contract. It is, as it purports to 
be, a part of the contract, and fixes the amount payable when 
death ( inter alia ) occurs from injuries resulting in certain ways 
from any of certain stated causes. If the language is clear, it 
may be construed upon the principles I have referred to; and 
there is no good reason why it should be given what is some- 
times called a benign interpretation. 



So far as material here, the provisions of Part G have reference 
to the “case of injuries happening from any of the following causes, 
viz., intentional injuries . . . fits . . . causing death, 

loss of sight or limb.” “Causing” appears from the context of 
the whole clause to be in the same grammatical relation to “in- 
juries” that “happening” is. 

Part G clearly applies whenever injuries which cause death 
“happen” by accidental means from any of the specified causes, 
including a fit or “fits.” 

The injuries from which Wadsworth died happened from “fits,” 
according to the finding of the trial Judge. 

For the plaintiff it is contended that the “fits” must be 
shewn to be the immediate, proximate cause of death, before the 
defendants can invoke the provisions of Part G in their favour. 
So to construe Part G is, in my opinion, to subject it to a strain 
which, upon consideration of the whole contract, it cannot bear. 

“In case of injuries,” in Part G, has reference manifestly to 
injuries of the kind insured against — injuries resulting in dis- 
ability, and “caused solely by external, violent, and accidental 
means.” The succession of events directly resulting from the 
paroxysm — the overturning and breaking of the lighted lantern, 
the escape and ignition of the oil, the flames which enveloped 
Wadsworth, his inability owing to unconsciousness to give any 
alarm or extinguish his burning clothing — all are, in my opinion, 
but “means,” within the true intendment of the policy, lying 
between the fit as a cause and the injuries as an effect of that 
cause. This conclusion appears all the more reasonable if one 
considers some of the “causes” enumerated in the same category 



XXVI.] 



ONTARIO LAW REPORTS. 



73 



as “fits.” “Sleep-walking,” for instance, cannot be the imme- 
diate cause of “injuries causing death, loss of sight or limbs.” 
Some accident must intervene; some means must lie between 
the mere somnambulism and any serious injury caused while in 
that state. 

No support is, I think, given to the plaintiff's contention 
by the cases which have been cited on her behalf. They are but 
illustrations of the application of the maxim, In jure non remota 
causa sed proxima spectatur ; and they apply, in matters of con- 
tract, wherever the agreement either expressly or by implica- 
tion provides that the immediate cause must be looked to. 

The many cases in which liability of insurers for loss caused 
by fire has been considered are authority for the proposition 
that, where such a loss has been insured against, it is immaterial 
that the fire itself was caused by the negligence of the agents 
or servants of the assured. The fire was the proximate cause 
of the loss sustained, and the cause of that cause could not be 
regarded. But, if the policies had provided that there should 
be no liability in case the fire resulted from such negligence, the 
decisions referred to would have been given for the defendants. 

The case is not, to my mind, one in which it is necessary to 
consider whether the epileptic paroxysm was or was not the 
immediate and proximate cause of death. If it were, I should 
feel myself bound by Winspear v. Accident Insurance Co., 6 
Q.B.D. 42, and Lawrence v. Accidental Insurance Co., 7 Q.B.D. 
216. In both of these cases, as Lord Justice Collins points out in 
Hensey v. White, [1900] 1 Q.B. 481, at p. 485, there was a for- 
tuitous unexpected element — the presence of a stream in the 
one case and of a moving railway train in the other — which 
turned a normal condition of affairs into a catastrophe. The 
fit did not cause the stream to drown Winspear. His condition 
did not cause the stream to flow where it was flowing when he 
fell into it. Lord Justice Collins points out that it was just as 
though the epileptic had been struck by lightning while lying 
on the ground. Nor did the fit in the Lawrence case cause the 
train to run which passed over the neck and body of the deceased. 
The decision in Hensey v. White, as to what is an “injury by 
accident,” within the meaning of the Workmen's Compensation 
Act, 1897, was overruled in Fenton v. Thorley & Co. Limited, 



D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Latchford, J. 



74 

D. C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Latchford, J. 



ONTARIO LAW REPORTS. [vol. 

[1903] A.C. 443; but that circumstance in no way affects the 
force of the observations I have quoted. 

And the reason occurs to me why the Winspear and Lawrence 
cases are distinguishable. In both (as here) the insurance was, 
inter alia, against death by accident. But in each there was an 
exception, that there should be no liability in certain circum- 
stances. The defendants were obviously liable unless they could 
clearly bring themselves within the exceptions which, upon well 
recognised principles, were to be construed most strongly against 
the defendants. The exceptions were held not to be open to the 
defendants, because the accidents were not caused directly and 
proximately by the excepted causes. In the present case, the 
clause Part G, relied on by the defendants, is not in the nature 
of an exception. It is as much a term of the contract as the 
“face,” as it has been called, of the policy, and simply states 
circumstances in which the amount of the company’s liability is 
to be one sum, instead of another fixed by a different term of 
the policy. Moreover, the fit, as I have stated, was the causa 
causans of the breaking of the lantern and of the consequent 
injuries and death. If, in the Winspear case, the assured had, 
because of the fit, let loose a flood of water which overwhelmed 
him, or, in the Lawrence case, the assured had, because of the 
fit, started the engine which killed him — the decisions, notwith- 
standing the rules of construction applicable to exceptions, would 
have been different. 

I am unable to see any reason, either upon principle or author- 
ity, why the judgment appealed from should not be affirmed. 

Appeal allowed in part; Latchford, J., dissenting . 



XXVI.] 



ONTARIO LAW REPORTS. 



75 



[MIDDLETON, J.] 

Youlden v. London Guarantee and Accident Co. 1912 

Accident Insurance — Death Claim — Cause of Death — Injury from Lifting March 12 
Heavy W&ight — Evidence — Statement of Deceased — Admissibility — 

Conditions of Original Policy — 'Non-compliance with — Renewal Re- 
ceipt — Fresh Contract — Reference to Original Policy — Sufficiency — 

Insurance Act , R.S.O. 1897, ch. 203, sec. 144. 

In an action by the beneficiary under a contract insuring Y. against acci- 
dent and death from accident, to recover the amount payable upon 
death from accident, it appeared that, on the day before his death, Y. 
had lifted a heavy weight, and, shortly after doing so, had stated to 
'S. that he thought he had hurt himself. According to the medical 
evidence, the malady from which Y. died was caused by the invasion of 
the system by pernicious bacteria, and this invasion might have been 
occasioned by an internal injury: — 

Held, that evidence of the statement made to S. was admissible for the 
purpose of proving the physical condition of Y., and was sufficient to 
establish that, shortly after Y. had been engaged in lifting, he had, as 
he said, indications that he had been hurt. 

Gilbey v. Great Western R.W. Co. (1910), 102 L.T.R. 202, specially re- 
ferred to. 

And held, that from the fact of the injury the inference might be drawn 
that the lifting was the cause of it; the symptoms indicated that Y. 
did suffer an injury in lifting; and, upon the evidence, this injury 
was the cause of his death — it being a possible cause and the only 
one of several possible causes shewn to have actually existed; and the 
evidence shewed that up to the happening of the accident Y. appeared 
to be in perfect health. 

In re Etherington and Lancashire and Yorkshire Accident Insurance Co., 

[1909] 1 K.B. 591, followed. 

The policy issued upon the original insurance, in 1902, contained pro- 
visions and stipulations as to notice, made conditions precedent to the 
right to recover; and these had not been complied with. This policy 
did not contemplate any renewal; it evidenced an insurance for one 
year only. The plaintiff relied upon what was called a renewal re- 
ceipt, as a new contract of insurance. It did not contain the provi- 
sions as to notice; it evidenced an insurance for a year “according to 
the tenor” of the original policy, referring to it by number: — 

Held, that the contract evidenced by the renewal receipt was to be re- 
garded as a new insurance, depending entirely upon a new agreement 
between the parties. 

Carpenter v. Canadian Railway Accident Insurance Co. (1909), 18 O.L.R. 

388, followed. 

But held, that the reference to the former policy was a sufficient compli- 
ance with the provisions of the Insurance Act, R.S.O. 1897, ch. 203, 
sec. 144, requiring the terms and conditions of the contract to be set 
out on the face or back of the instrument; and, therefore, by reason 
of the plaintiff’s non-compliance with the conditions of the original 
policy, she could not recover. 

Venner v. Sun Life Insurance Co. (1890), 17 S.C.R. 394, and Jordan v. 

Provincial Provident Institution (1898), 28 S.C.R. 554, followed. 

The plaintiff sued as beneficiary under a policy issued by the 
defendants, insuring the late Henry Youlden against accident 
and death from accident, to recover the sum named in the policy. 



76 

Middleton, J, 

1912 

Youlden 

V. 

London 

■Guarantee 

and 

Accident 

Co. 



ONTARIO LAW REPORT'S. [vol. 

February 27. The action was tried before Middleton, J., 
without a jury, at Kingston. 

J. L. Whiting, K.C., for the plaintiff. 

W. N. Tilley and C. Swabey, for the defendants. 

March 12. Middleton, J. : — The deceased had been insured 
with the defendants for some years, the policy having been issued 
on the 7th January, 1902, and the renewal premium paid on the 
2nd January, 1909. 

On the 23rd June, 1909, shortly after his dinner, the de- 
ceased — a member of a firm carrying on a foundry business in 
Kingston — was at the railway station, superintending and assist- 
ing in the loading of a retort upon a railway car. The retort 
weighed about three and a half tons, and had to be transferred 
from a dray to the railway car by means of jacks and other 
appliances. For the purpose of making a way for removing the 
retort, a heavy stick of timber, lying upon the railway premises, 
was desired to be used. This weighed from five to six hundred 
pounds. Youlden attempted to carry one end of this, wdiile the 
other end was carried by two men. His partner Selby went 
to his assistance; and shortly afterwards Youlden remarked to 
him that he was afraid he had injured himself. He then sat 
in the shade at the station for a time, and, feeling faint, he 
went with Selby to an hotel and took a glass of whisky and 
soda, and thereafter did no more work, but returned to the 
shop upon a rig, and sat around doing little or nothing until six 
o’clock, when he went home. The same evening, without taking 
any supper, he went to a garden party, where a presentation 
was to be made in which he was much interested. During the 
evening he partook sparingly of ice-cream, and went home at a 
little after ten o’clock. His wife, hearing that he was unwell, 
followed him home; and shortly thereafter he lay down upon a 
sofa to rest for the night, in a dressing-gown. During the night 
he was uncomfortable and restless, could not sleep, and, his wife 
said, “looked miserable and grey.” Nevertheless, he went to 
the office in the morning, but stayed there only a short time, re- 
turning in about half an hour. A doctor was called, and found 
him weak and in pain. He had then had a violent motion of 
the bowels, and appeared to be generally collapsed. By the 



XXVI.] 



ONTARIO LAW REPORTS. 



77 



evening his temperature was high and there was further bowel 
trouble. The case developed into a case of acute enteritis, which 
would not yield to treatment, and finally caused his death. 

The plaintiff alleges that a strain was caused by the exertion 
of lifting the timber, and that, this strain brought about a physi- 
cal condition which enabled bacteria in the digestive tract to 
develope to such an extent that death resulted from his in- 
ability to resist their attack, by reason of the reduced vitality 
following the strain in lifting the timber. 

At the trial I admitted in evidence, against the protest of 
the defendants’ counsel, the statement made by the deceased to 
his partner Selby, shortly after he had lifted the timber, that he 
thought he had hurt himself. It is argued that, apart from this, 
there is no evidence of the existence of a strain. The medical 
men stated that there was no physical condition indicating a 
strain; that the injury, if it existed, was internal only; and 
that the only knowledge they had of its existence would be 
from statements made to them by the patient of his symptoms, 
and the history of the case. The symptoms made it quite plain 
that the malady was caused by the invasion of the system by 
pernicious bacteria. This invasion, in the opinion of the doctors, 
might well be occasioned by any injury to the system which 
rendered it unable to manifest the normal resistance of a healthy 
and uninjured individual ; but the result might follow equally 
from anything which would bring about a marked reduction of 
vitality, or it might follow from the introduction of pernicious 
bacteria in the food taken — the latter being the general origin 
of such a malady. The ice-cream taken the evening before, if 
impure or tainted, would adequately account for the condition 
found. 

It, therefore, becomes a matter of great importance to ex- 
amine the propriety of my ruling. In Garner v. Township of 
Stamford (1903), 7 O.L.R. 50, the Divisional Court had to con- 
sider the admissibilty of the statement made by the deceased 
when she was discovered a short time after an accident upon a 
highway. Her statement was made in reply to a question as to 
the cause of the injury. The statement was tendered as being 
part of the res gestae , but was rejected; because the rule there 



Middleton, J. 

1912 

Youlden 

London 

Guarantee 

and 

Accident 

Co. 



78 



ONTARIO LAW REPORTS. 



[VOL. 



Middleton, J. 

1912 

Youlden 

V. 

London 

Guarantee 

and 

Accident 

Co. 



invoked only makes statements admissible when they are in- 
voluntary exclamations at the time of the accident, and does not 
warrant the reception of statements or exclamations made after 
there has been time for reflection. 

Gilbey v. Great Western R.W. Co. (1910), 102 L.T.R. 202, 
is a later decision of the Court of Appeal, perhaps somewhat 
closer to this case. Compensation was claimed in respect of an 
accident under the Workmen’s Compensation Act. It was 
alleged that the deceased, while carrying a side of beef, so 
strained himself as to cause an injury to his lungs. The post 
mortem examination disclosed a tear in the lung and made it 
plain that this brought about death. The Judge of the County 
Court admitted in evidence the statements of the workman to 
his wife, not merely of his sensations and of his feelings, but as 
to the cause and occasion of the injury from which he was 
suffering. In the judgment of the Court of Appeal the prin- 
ciple applicable here is pointed out. Cozens-Hardy, M.R., says : 
“I do not doubt at all that statements made by a workman to 
his wife of his sensations at the time, about the pain in the side 
or head, or what not — whether those statements were made by 
groans or by actions or were verbal statements — would be ad- 
missible to prove the existence of those sensations. But to hold 
that those statements ought to go farther and to be admitted as 
evidence of the facts deposed to is, I think, open to doubt; such 
a contention is contrary to all authority.” 

The Irish Court of Appeal, Wright v. Kerrigan, [1911] 2 
I.R. 301, had before it a claim under the Workmen’s Compensa- 
tion Act, where part of the evidence tendered was a statement of 
the deceased to a doctor as to how the injury was received. 
Cherry, L.J., mentions this evidence, saying: “Hearsay evidence 
is in some cases admissible, and the learned Recorder appears to 
me to have acted strictly in accordance with the settled rules 
of evidence. . . . He ruled out statements as to the circum- 

stances of the accident. He admitted the statements made by 
the deceased man to his medical attendant . . . as to his 

symptoms and their cause. Such statements are usually held 
to be admissible upon the ground that there is no other means 
possible of proving bodily or mental feelings than by the state- 
ments of the person who experiences them.” 



XXVI.] 



ONTARIO LAW REPORTS. 



79 



In Amys v. Barton , [1911] W.N. 205, the accuracy of this 
statement of the law was canvassed by the Court of Appeal, and 
Cozens-Hardy, M.R., pointed out that the words “and their 
cause” in the statement by Cherry, L.J., could not be sup- 
ported, but appeared to approve of the rule as stated, with this 
exception. 

In the 9th edition (1910) of Powell on Evidence, p. 358, the 
admissibility of statements for the limited purpose of proving 
the physical condition of the person making the statement is 
asserted ; and I think for this purpose the evidence was properly 
admitted, and it is sufficient to establish that, shortly after the 
deceased had been engaged in lifting the timber, he had, as he 
said, indications that he had been hurt. 

The statement, perhaps, did not go so far as to indicate that 
the lifting of the, timber was the cause of the injury; but I 
think that this is an inference which may be drawn from the 
fact of the injury, and falls within the principle indicated in 
Richard Evans & Co. Limited v. Astley, [1911] A.C. 674, 678, 
where it is said: “The applicant must prove his case. This does 
not mean that he must demonstrate his case. If the more prob- 
able cause is that for which he contends, and there is anything 
pointing to it, then there is evidence for a Court to act upon. 
Any conclusion short of certainty may be miscalled conjecture 
or surmise, but Courts, like individuals, habitually act upon 
a balance of probabilities. ’ ’ See also the decisions of the 
Supreme Court of Canada in McKeand v. Canadian Pacific R. 
W. Co., not yet reported, and in Grand Trunk R.W. Co. v. 
Griffith (1911), 45 S.C.R. 380. 

Acting upon this principle, I find that the symptoms indi- 
cate that the deceased, at this time, did suffer an injury in 
lifting the timber in question; and I further find that this 
injury was the cause of his death. I believe this to be the cause, 
because, as I understand the medical evidence, it is a possible 
cause, and it is the only one of the several possible causes which 
is shewn to have actually existed. There is no evidence that 
the ice-cream eaten was tainted; and the evidence satisfies me 
that up to the happening of the accident the deceased appeared 
to be in perfect health. This brings the case within the decision 



Middleton, J. 

1912 

Youlden 

V. 

London 

•Guarantee 

AND 

Accident 

Co. 



80 

Middleton, J. 
1912 

Youlden 

V. 

London 

GlTABANTEiE 

AND 

Accident 

Co. 



ONTARIO LAW REPORTS. [vol. 

of the Court of Appeal in In re Etherington and Lancashire and 
Yorkshire Accident Insurance Co., [1909] 1 K.B. 591. 

It is, therefore, necessary to consider the other matters dealt 
with upon the argument. 

The policy, issued in 1902, contains provisions and stipula- 
tions as to notice wdiich, it is admitted, were not complied with, 
and which are made conditions precedent to the right to 
recover. 

The plaintiff contends that the terms of this policy are not 
binding upon her, because the renewal receipt, as it is called, 
constitutes a new contract of insurance ; and, by sec. 144 of the 
Insurance Act, R.S.O. 1897, ch. 203, “the terms and conditions 
of the contract” not having been “set out by the corporation in 
full upon the face or back of the instrument forming or evid- 
encing the contract,” “no term of, or condition, stipulation, 
warranty or proviso, modifying or impairing the effect of any 
such contract made or renewed after the commencement of this 
Act shall be good and' valid, or admissible in evidence to the 
prejudice of the assured or beneficiary.” 

Is this a new contract within the meaning of the statute? 
The original contract, unlike many insurance policies, does not 
contemplate any renewal. It is an insurance for one year, and 
one year only ; and, upon the principle acted upon by the Court 
of Appeal in Carpenter v. Canadian Railway Accident Insur- 
ance Co. (1909), 18 O.L.R. 388, the contract evidenced by the 
renewal receipt is to be regarded as a new insurance, depending 
entirely upon a new agreement between the parties. I do not 
think that this is at all in conflict w T ith Liverpool and London 
and Globe Insurance Co. v. Agricultural Savings and Loan Co. 
(1903), 33 S.C.R. 94, where the decision of the Court of Appeal, 
Agricultural Savings and Loan Co. v. Liverpool and London and 
Globe Insurance Co. (1901), 3 O.L.R. 127, is reversed. 

This new contract is, according to the terms of the receipt, a 
contract of insurance for a year “according to the tenor of 
policy 565996.” 

Referring in the first place to the statute itself, the intention 
of the Legislature appears to be plain. The contract to insure 
is to stand, but it is to be purged of all terms and conditions 
modifying the primary contract in the interest of the company 



XXVI.] 



ONTARIO LAW REPORTS. 



81 



and to the prejudice of the insured, unless the terms are set 
out upon the face or back of the instrument evidencing the con- 
tract. “Instrument” must be understood, in the light of the 
Interpretation Act, as meaning “instrument or instruments;” 
and the contention of the company is, that the reference in the 
receipt to the original policy constitutes it one of the instru- 
ments forming or evidencing the contract, and that its terms 
are, therefore, binding; and, in the alternative, that the refer- 
ence to the former policy is a sufficient compliance with the Act. 
The contention of the assured is, that the Legislature intended 
to render insufficient a mere reference to some other document 
in which the terms of the insurance are to .be found, and to re- 
quire the whole contract to appear on the face of the single 
sealed or written instrument which forms or evidences the 
contract. This argument is much fortified by sub-clauses (a) 
and (b), which expressly permit the application and the rules 
of friendly societies to be embodied in the contract by reference. 

The cases I find to be very difficult. In Venner v. Sun Life 
Insurance Co. (1890), 17 S.C.R. 394, the statute under con- 
sideration was the Dominion Insurance Act, R.S.C. 1886, ch. 
124, sec. 27. This provided that “no condition, stipulation or 
proviso modifying or impairing the effect of any policy . . . 

shall be good or valid unless such condition, stipulation or pro- 
viso is set out in full on the face or back of the policy. ’ ’ There 
the policy had been issued “upon the representations, agree- 
ments and stipulations” contained in the application; and the 
Supreme Court held that the section in question could not be 
relied upon as an answer to a claim that the policy was void 
by reason of misrepresentation contained in the application. 

It is difficult to see how it could be thought that the section 
had anything to do with the question whether the contract had 
been obtained by fraud. Mr. Justice Taschereau, in the course 
of his judgment, does not pass upon this point, but says that, 
if applicable, the stipulation in the application “is in express 
terms referred to in the body of the policy, so that the appellant 
cannot invoke against the company section 27.” None of the 
other Judges referred to the point: Mr. Justice Gwynne giving 
reasons ; the other three Judges simply agreeing that the appeal 
should be dismissed. 

6 — XXVI. O.L.B. 



Middleton, J. 
1912 

Youlden 

V. 

London 

Guarantee 

and 

Accident 

Co. 



82 



ONTARIO LAW REPORTS. 



[VOL. 



Middleton, J. 

1912 

Youlden 

V. 

London 

Guarantee 

and 

Accident 

Co. 



In Jordan v. Provincial Provident Institution (1898), 28 
S.C.R. 554, the appeal was from Ontario, and the statute under 
consideration was the Ontario Act, 55 Viet. ch. 39, sec. 33. This 
statute modified in some important respects the earlier Ontario 
Act, 52 Viet. ch. 32, sec. 4 (which was in practically the same 
words as the Dominion statute) and is identical with the present 
Ontario Act (sub-sec. (5) having been added in 1895 by 58 Viet, 
ch. 34, sec. 5, sub-sec. 10). The policy was in substantially the 
same form as that under consideration in the Venner case. It 
was issued in consideration of the statements contained in the 
application. There was material misstatement. The judgment 
of the Supreme Court is given by Sedgewiek, J., who says: “We 
consider that the Ontario Insurance Act of 1892, section 33, sub- 
section 1, was complied with in the present case, following, as 
we do, the decision in the case of Venner v. Sun Life Insurance 
Co:’ 0 



This precludes my independent consideration of the question, 
as I think it is an authoritative statement that, notwithstanding 
the provision of the Act, the section in question is complied with 
when the document relied upon is referred to and sufficiently 
identified in the contract. Had the Supreme Court not seen fit 
to place its judgment upon this ground, I should have thought 
it apparent from the terms of the statute that the application 
might be identified by reference, and that this express pro- 
vision found in clause ( b ) went far to indicate that this was 
intended to be an exception to the general rule. 

The question again rose in Hay v. Employers’ Liability As- 
surance Corporation (1905), 6 O.W.R. 459, where Mr. Justice 
Osier says: “Whatever other construction we might have felt 
ourselves at liberty to place upon sec. 144, sub-sec. (1), of the 
Ontario Insurance Act, R.S.O. 1897, ch. 203, we are now bound 
by the decisions of the Supreme Court of Canada ... to 
hold that the plaintiffs’ proposal and the statements therein 
contained are, by reference thereto in the policy, sufficiently in- 
corporated therewith and set out in full therein, within the 
meaning and rquirements of the . . . section.” And in 

Elgin Loan and Savings Co. v. London Guarantee and Accident 
Co. (1906), 11 O.L.R. 330, this statement is adhered to. 



XXVI. ] 



ONTARIO LAW REPORTS. 



83 



I cannot see any ground upon which I should be justified in 
attempting to distinguish the case in hand from what is said 
in the authorities referred to. These cases, as I have already 
pointed out, might have been rested upon the fact that the 
application is, by clause (5), excepted from the more general 
provision of the section; but the Court has deliberately re- 
frained from placing its decisions upon this ground, and has 
preferred to adopt a construction of the clause which, I fear, has 
had the effect of nullifying the intention of the Legislature. If 
I am right in this, it is admitted that the plaintiff’s action 
fails; and it is not necessary to consider the other questions 
argued. 

The action is dismissed without costs. 

[IN CHAMBERS.] 

Jarrett v. Campbell. 

Trial — Action to Establish Will — Judicature Act, sec. 103 — Application for 
Order for Trial by Jury — Refusal — Discretion — Leave to Appeal — Prac- 
tice . 

An action to establish a will, transferred from a 'Surrogate Court to the 
High Court, is one within the former exclusive jurisdiction of the Court 
of Chancery, within the meaning of sec. 103 of the Judicature Act, R.S.O. 
1897, ch. 51; and is, therefore, to be tried without a jury, unless other- 
wise ordered. 

In the circumstances of this case, a Judge in Chambers refused to make an 
order for trial by jury; and another Judge refused leave to appeal to 
a Divisional Court. 

Review of the legislation and practice. 

Re Lewis (1885), 11 P.R. 107, approved and. followed. 

Motion by the defendant Campbell for an order directing 
that the issues in this action be tried by a jury. 

March 15. The motion was heard by Falconbridge, C.J.K.B., 
in Chambers. 

R. McKay , K.C., for the defendant Campbell. 

E. C. Cattanach, for the plaintiffs. 

J. R. Meredith, for the infant defendants. 

March 18. Falconbridge, C. J. : — The action concerns the 
validity of the will of the late Charles Bugg. The plaintiffs, the 
executors named in it, propounded it for probate in the Surro- 



Middleton, J. 

1912 

Youlden 

V. 

London 

Guarantee 

AND 

Accident 

Go. 



1912 

March 18. 
March 25. 



84 



ONTARIO LAW REPORTS. 



[VOL. 



Falconbridge, 

C.J. 

1912 

Jarrett 

V. 

Campbell 



gate Court of the County of York. The defendant Campbell, the 
only surviving child and heir-at-law of the deceased, contested 
probate, upon the ground that the will was not duly executed, 
and that the testator had not testamentary capacity; also upon 
the ground that the execution of the will was obtained by the 
undue influence of the plaintiffs’ who are not only executrices 
but residuary legatees under the will, and who beneficially take 
the greater portion of the testator’s estate, which is very large. 
The proceedings were transferred from the Surrogate Court to 
the High Court, and the order of transfer reserved to any party 
the right to apply for a trial with a jury. 

In Re Lewis (1885), 11 P.R. 107, Ferguson, J., determined 
that a probate action, transferred from a Surrogate Court to 
the High Court, was a matter over which the Court of Chancery 
had, at the time of the passing of the Judicature Act, exclusive 
jurisdiction; this being at that time the criterion upon which 
the right to demand a jury by a mere jury notice depended, as 
well as the criterion as to the mode of trial pointed out by sec. 
45 of the Judicature Act of 1881. 

Prior to that statute, Surrogate Court proceedings could be 
transferred to the Court of Chancery, and became subject to the 
general provisions of the Chancery Act, which contained a pro- 
vision authorizing an order directing a trial by jury. 

By the section in question, in cases in which the Court of 
Chancery had exclusive jurisdiction, “the mode of trial shall 
be according to the present practice of the Court of Chancery.” 

In the revision of 1887 (R.S.O. 1887, ch. 44, sec. 77) this sec- 
tion was recast, and assumed the form in which it is now found, 
as sec. 103 of the Judicature Act, R.S.O. 1897, ch. 51, which pro- 
vides that “all causes, matters, and issues, over the subject of 
which prior to the Administration of Justice Act of 1873, the 
Court of Chancery had exclusive jurisdiction, shall be tried 
without a jury, unless otherwise ordered.” The change of date 
from 1881 to 1873 is in this case immaterial, because the pro- 
vision of the Surrogate Courts Act relating to transfer of causes 
to the Court of Chancery is found in the Consolidated Statutes 
of 1859. > 

As is pointed out in Re Lewis, the legislation here and in 
England upon this point has proceeded upon widely differing 



XXVI.] 



ONTARIO LAW REPORTS. 



85 



lines. The right of the heir-at-law in England to have the issue 
devisavit vel non tried by a jury was long carefully preserved 
to him ; but here the result of our legislation is, that primd facie 
the action “ shall he tried without a jury,” and the onus is upon 
the party seeking to have a jury to shew a case justifying it 
being “otherwise ordered.” 

In this case everything points to the desirability of a trial 
without a jury. There will he many witnesses — it is said some 
125 — and as many experts as the law or the trial Judge may 
allow to be called. The trial, it is said, will take two weeks. The 
circumstances of the case are such as to make it unlikely that 
the mind of the jury can be concentrated upon the real issue. 
As said in the case already referred to, “the cause can properly 
and fitly be disposed of in the ordinary way without the inter- 
vention of a jury.” 

Motion dismissed — costs in the cause. 



Falconbridge, 

C.J. 

1912 

Jarrett 

V. 

Campbell 



The defendant Campbell moved for leave to appeal to a 
Divisional Court from the order of Falconbridge, C.J.K.B. 



March 22. The motion was heard by Boyd, C., in Chambers. 
G. Grant , for the applicant. 

I. F. Hellmuth, K.C., for the plaintiffs. 

J. R. Meredith, for the infant defendants. 



March 25. Boyd, C. : — This application seeks to unsettle the 
practice and course of procedure by going back to one of the 
earliest statutes of old Upper Canada. Yet, even in England, 
the statute law of which was, so far as applicable to the condi- 
tion of this Province, adopted in 1791, the course of practice was 
not to regard the claim of the heir-at-law to have an issue tried 
before a jury as an absolute right, but one to be dealt with 
according to the circumstances. Thus in Man v. Ricketts (1844), 
7 Beav. 93, 101, Lord Langdale declined to direct such an issue, 
the will having been otherwise sufficiently proved as against the 
heir. Indeed, the real reason why the trial at law, and therefore 
by a jury, was granted in England, was because of “the frail 
and imperfect manner of examining into facts” then possessed 
bv tho. Court of Chancery. The words are those nf Lord Erskine 



86 



ONTARIO LAW REPORTS. 



Boyd, 0. 

1912 

Jarrett 

V. 

Campbell 



[VOL. 

in White v. Wilson (1806), 13 Yes. 87, at p. 91. This case is cited 
by Ferguson, J., and the wrong volume given in Re Leivis, 11 
P.R. 107, at p. 108 ; and it is now not to be questioned that such a 
reason does not exist in Ontario, where all Courts alike have the 
fullest power and the most searching method of investigating 
facts. The old course in England was to file a bill for the purpose 
of establishing the will as against the heir with regard to realty. 
Then there would be a hearing of such evidence as was admis- 
sible in equity practice; and, if a sufficient primd facie case of 
proof was made out, then an issue would be directed ( devisavit 
vel non) in order to establish conclusively as against the heir the 
fact of a valid will made by a competent testator. See the course 
pursued in Waters v. Waters (1848), 2 DeGr. & Sm. 591, 599. 

The English practice grew out of historical reasons. Until 
the Probate Court Act of 1857, 20 & 21 Viet. eh. 77, there was 
no jurisdiction to admit a will of land to probate. The only 
mode of testing the validity of such will w^as by an action of 
ejectment between the heir and the devisee. But in our practice 
the probate of will includes realty and personalty: realty is 
becoming more and more assimilated to personalty: with us the 
unique distinction of heir-at-law never obtained, for all children 
shared equally. All the reasons which necessitated (almost) a 
jury trial as against the heir-at-law in England, never existed 
here; and our practice is settled, whether the contest be in the 
lower Court or upon the removal of the contention to the High 
Court, that the trial of fact by jury is a matter for the sound 
discretion of the Court or a Judge: R.S.O. 1897, ch. 59, sec. 22* 
and sec. 35. These sections are conclusive as against any vested 
and absolute right of the heir to insist on a trial by jury. 

The practice was well settled by a very careful Judge in 1885, 
in Re Leivis , 11 P.R. 107 ; and I see no reason to doubt the 
correctness of the order of the Chief Justice of the King’s Bench, 
or to doubt that he wisely exercised his discretion, having re- 
gard to the issues raised and their magnitude and the complexity 
likely to arise in trying to sever the methods of trial in investi- 
gating the facts of this controversy. 

I disallow leave to appeal; and costs of the executors and 
other beneficiaries opposing should be paid out of the estate. 

*See now 10 Edw. VII. ch. 31, sec. 28. 



XXVI.] 



ONTARIO LAW REPORTS. 



87 



[BOYD, C.] 

Adams v. Gourlay. 

Will — Construction — Conditional Gift — Revocation upon N on- fulfilment of 

Condition — Distribution among other Legatees Named in Will — Legatee 

Named in Codicil — Status of, to Question Fulfilment of Condition — * 

Substantial Performance of Condition — Cy-pres Doctrine. 

A codicil forms part of the will or testamentary instrument, but not neces- 
sarily to all intents and purposes. 

The testator, by his will, gave the bulk of his property to his two nieces, 
but upon a certain condition, to be fulfilled in his lifetime, and which 
was not made known to them until after his death; and, in the event of 
their not fulfilling the condition, he revoked the devises and bequests 
to them, and directed that “their shares be distributed equally among 
the other legatees named in this my will.” A year and a half later, 
he executed a codicil, by which he gave a small legacy to the plaintiff, 
who was not named or referred to in the will. The codicil did not in 
terms say that it was made part of the will, but it confirmed the will 
and gave other pecuniary legacies to persons not named in the will. 
After the testator’s death, the executor, deeming that the condition had 
been fulfilled, turned over to the two nieces the property bequeathed 
to them. The plaintiff, on her own behalf and not representing any 
other possible claimants, sued the executor and the two nieces for an 
account and a share of the property transferred to the nieces, alleging 
that they had not fulfilled the condition, and that she (the plaintiff) 
was entitled as one of the other legatees named in the will : — 

Held, that the plaintiff, being a legatee only by virtue of the codicil, was 
not one of the legatees contemplated in the will, and had no locus 
standi to question the conduct of the executor in making over the prop- 
erty to the two nieces. 

Eenwood v. Overend (1815), 1 Mer. 23, and Hall v. Severne (1839), 9 Sim. 
515, followed. 

Semble, that there had been a substantial performance of the condition by 
the nieces; and, by the application of the cy-pres doctrine, the condition 
had been practically satisfied. 

Action for construction of the will of George Baker; for an 
accounting by the defendant the executor; to recover from the 
defendants the Misses Baker the moneys and property of the 
estate transferred by them to the executor; and for administra- 
tion. 

March 20. The action was tried before Boyd, C., without 
a jury, at Stratford. 

R. S. Robertson, for the plaintiff. 

F. H. Thompson , K.C., for the defendants. 

March 25. Boyd, C.:— The testator gives the bulk of his 
property to his two nieces, who are, with the executor, defendants, 
upon this condition: — 

“Upon their remaining with me as my housekeepers at all 
times (unless I consent to one or both of them going out) during 



1912 

March 25. 



88 



ONTARIO LAW REPORTS. 



Boyd, 0. 



1912 

Adams 

v. 

Gourlay 



[VOL. 



the remainder of my life and during that time rendering me faith- 
ful service and giving me all necessary and proper attention and 
all proper care and nursing in case of illness or in case I should 
become feeble and should they fail in those respects or any of them 
I hereby absolutely revoke the said devise and bequests to them 
and direct that in lieu thereof my executors shall pay to my said 
niece Sarah Elizabeth Baker the sum of two hundred dollars only 
and I direct that their shares be distributed equally among the 
other legatees named in this my will.” 



“And I hereby further declare notwithstanding anything 
hereinbefore contained that it is not my will or intention that it 
shall be compulsory for both of my said nieces to remain with me 
at all times but that it will be sufficient if one of them is with me 
when I am in my usual health and that both of them shall be pres- 
ent when I require the services of both and so notify them.” 

The will was made in February, 1907; a codicil was added 
giving the legacy of $100 to the plaintiff under the name of Ellen 
Hamilton — she not being named or referred to in the will — codicil 
dated in September, 1908. The testator died on the 27th Sep- 
tember, 1910. His wife died in 1906, and he had no children. 
I am not clear as to his age, but I think it was about eighty. 
The nieces did not know of the terms of the condition or of any- 
thing that was in the will — nor did any one, according to the 
evidence, but the solicitor who drew it (who was not called as a 
witness). The nieces, however, lived with him and cared for him, 
as it turned out, according to the terms of the condition, however 
strictly construed, from before the date of the will and just upon 
the death of his wife, until the 19th July, 1909, when a change in 
his health and habits became very apparent, which had begun 
about the date the physician was summoned during February, 
1909; then, at his instance, more competent assistance was called 
in, under the supervision of the nieces, and this state of domestic 
affairs continued until his death. 

Then first became known the condition expressed in the will; 
and, on a review of and with knowledge of all that was detailed 
before me in evidence, the executor paid over or turned over to 
the two beneficiaries the property now claimed (in part) by the 
plaintiff. The plaintiff, as she testified, sues on her own behalf 



XXVI.] 



ONTARIO LAW REPORTS. 



89 



solely, and is not joined by and does not represent any other 
possible claimants under the will. 

I expressed my opinion as the the effect of the evidence at the 
close of the argument, but reserved judgment generally. I now 
deal first with the right of the plaintiff to maintain this action. 

In Henwood v. Overend (1815), 1 Mer. 23, the residue was to 
be divided “ amongst the several legatees in proportion to the 
several sums of money bequeathed to them by this my will.” 
By a codicil specified “to be added to and taken as part of” the 
will, other legacies were given to other legatees. Sir William 
Grant, M.R., held that the legatees under the codicil were excluded 
from sharing in the residue; and that the words “by this my will” 
were not less strong than the words “hereby” and “hereinafter,” 
which were so restrictively construed by the Lord Chancellor in 
Bonner v. Bonner (1807), 13 Yes. 379. 

Sir William Grant’s decision was approved and followed by 
Shadwell, V.-C., in Hall v. Severne (1839), 9 Sim. 515, where the 
residue was to be proportionably divided among “the herein- 
before mentioned legatees;” and in a codicil, which he declared 
to be a part of his will, he gave other legacies to other persons 
and also additional legacies to those who were legatees in the will. 
It was held that none of the legatees under the codicil were to 
share in the residue in respect of their legacies under the will. 
The Vice-Chancellor declined to follow the case of Sherer v. 
Bishop (1792), 4 Bro. C.C. 55, in which Lord Commissioner Eyre 
said that a codicil was a part of the testamentary disposition, 
though not part of the instrument, and on this ground that the 
residue should be divided among legatees (described as “such 
relations only as are mentioned in this my will ”) and other legatees, 
also being relations, named in the codicil; the two other Lords 
Commissioners, Ashhurst and Wilson, hesitating a good deal at 
this extension of the word “will” and doubting the construction. 
Shadwell, V.-C., favoured the opinion of the hesitating and 
doubting Judges, and characterised that of the Chief Commissioner 
as “a very extraordinary one.” The concurrence of opinion in 
two such Judges as Grant and Shadwell, both skilled in questions 
of construction, may well be followed without hesitation. The 
words used in this will are identical with those used in the case 
in 1 Mer. 



Boyd, C. 

1912 

Adams 

v. 

Gourlay 



90 



ONTARIO LAW REPORTS. 



Boyd, C. 

1912 

Adams 

v. 

Gourlay 



[vol. 



Looking at this will per se, I would not think the testator’s 
meaning to be doubtful. He directs that the property intended 
to be given to his two nieces, which, upon their default in certain 
conditions, is to be revoked, shall then be distributed “ equally 
among the other legatees named in this my will.” The codicil 
does not in terms say that it is made part of the will, as in the Severne 
case, but it confirms the will and gives other pecuniary legacies 
to persons not named in the will. The obvious meaning, to my 
mind, is, that the testator named in the will those who are to 
share equally in the revoked property, and does not intend that 
the legatees first named in the codicil shall come in to diminish 
what is given to those named in the will. 

It was said in argument that Hall v. Severne has been dis- 
credited. On the contrary, I find it has not been impeached, but 
rather upheld. It was followed in Early v. Benbow (1846), 2 
Coll. 342, and both cases were referred to as authorities by Farwell, 
J., in Re Sealy (1901), 85 L.T.R. 451; and was held to be rightly 
decided by Sullivan, M.R., in Donnellan v. O'Neill (1871), Ir. R. 
5 Eq. 523, 532, on the ground that the shares of the residue were 
fixed by the will, and so were the persons to take them, and there 
was nothing in the codicil to alter this express gift. And, in 
addition to all this, it was followed as late as 1907 by a Divisional 
Court in Re Miles (1907), 14 O.L.R. 241, a decision binding upon 
me. 



There isrno doubt of the general principle that a codicil forms 
part of the will or testamentary instrument, but not necessarily 
to all intents and purposes. As said by Lord Hardwicke, C., in 
Fuller v. Hooper (1750), 2 Yes. Sr. 242, “the testament . . . . 

may be made at different times and different circumstances, and 
therefore there may be a different intention at making one and 
the other.” 

I hold, therefore, that the present plaintiff, being a legatee 
only by virtue of the codicil signed and made on the 9th September, 
1908, is not one of the legatees contemplated in the will made on 
the 7th February, 1907. This being so, and as the evidence is 
that she sues only for herself and in her own behalf, she has no 
locus standi to question the conduct of the executor in paying over 
the property devised to the two nieces, who take under the terms 
of the will. 



XXVI.] 



ONTARIO LAW REPORTS. 



91 



This lessens the importance of the main question as to whether 
these nieces are entitled to take the property. My impression 
at the trial was, that, upon the facts, there had been a sufficient 
compliance with the conditions requisite to their success. I refer 
to my comments on the evidence at the close of the trial, as 
follows : — 

I do not propose to dispose finally of this case at present; 
there are legal questions that arise; but upon the evidence I will 
just say a few words that strike me now. 

There are two parts in this will to be regarded. The benefits 
to the two Baker nieces are conditional “upon their remaining 
with me as my housekeepers at all times” — I leave out the par- 
enthesis — “during the remainder of my life and during that time 
rendering me faithful service and giving me all necessary and 
proper attention and all proper care and nursing in case of illness 
or in case I should become feeble.” Then there is the clause put 
in, “upon their remaining with me as my housekeepers at all 
times (unless I consent to one or both of them going out).” There 
is a provision there that there may be a remission of the continuous 
attendance of one of them, or even of both of them — going out 
from his house, and therefore ceasing to be his housekeepers; and 
then at the end, which is to be taken as the strongest part of the 
will, if there is any ambiguity, there is his declaration, “I hereby 
further declare notwithstanding anything hereinbefore contained 
that it is not my will or intention that it shall be compulsory for 
both of my said nieces to remain with me at all times but that it 
will be sufficient if one of them is with me when I am in my usual 
health and that both of them shall be present when I require the 
services of both and so notify them.” 

Of course they did not know this. This was entirely in the 
testator’s breast and in the office of his solicitor, locked up in the 
will; and neither of these women knew anything about this. 
Only the testator himself knew what was in it. He knew what 
was in the will; and, whether or not they were requested, they 
acted on the terms of this will. It was not compulsory for both 
of his nieces to remain with him at all times. “It will be sufficient 
if one is with me when I am in my usual health.” Now, one or 
other of them was with him continuously, under the strictest 
terms of the will, while he was in his usual health. I think his 



Boyd, C. 

1912 

Adams 

v. 

Gourlay 



92 



ONTARIO LAW REPORTS. 



[vol. 



Boyd, C. 

1912 

Adams 

v. 

Gourlay 



usual health failed, his usual condition failed, at the time the doc- 
tor was called in, in February, 1909, and he degenerated more or 
less from that time until Mrs. Mutton was called in to take 
possession as housekeeper in July, 1909. They remained with 
him during his usual health and down to the time, three days 
after the time in fact, that Mrs. Mutton came in, and then they 
were superseded by her as housekeepers; but, I think, the evidence 
amply justifies the conclusion that — whatever his state of mind 
may have been from a legal point of view, as to his legal capacity 
and so on — he had certainly lucid intervals, he was able to under- 
stand matters; and, although you could not fully intrust to him 
the disposal of business, he understood what was going on. I 
cannot fail to reach that conclusion from the whole of the evidence, 
the evidence given by Mrs. Mutton herself, as well as the evidence 
of others. Mrs. Mutton had reasons for knowing, and she tells 
us that on one occasion, when he was making some objection to 
signing a cheque, they told him it was to pay Mrs. Mutton, and 
he signed it. That corroborates what the two women themselves 
say, that he was aware that they were collecting his income, his 
rents and so on, and that they were transacting his financial 
business, that they were paying Mrs. Mutton as housekeeper, 
and that the niece who had been housekeeper under wages had 
ceased to receive wages some time before, and that Mrs. Mutton 
was acting in her stead and she so continued. He was aware 
of that change; and, I think, it would not be at all unfair to treat 
that transaction, his knowledge of it, and his consent to it, and 
his agreeing that Mrs. Mutton should be paid, as an outcome 
of this parenthetical clause, “unless I consent to one or both of 
them going out.” They both did go out. They necessarily 
went out, I think, because of the condition of the man himself, 
and he in effect consented to their doing so, and consented to 
the other housekeeper coming and being appointed in their stead. 
That is the equitable construction to give to the will, of which 
I think it is susceptible, and I am inclined to think that the evi- 
dence would justify it. 

Turning to the evidence, it is quite plain from what the doctor 
said that it was unsafe for those women to stay there any longer. 
He advised a change. He did so with scientific knowledge and 
accuracy and judgment required in dealing with such cases. He 



XXVI.] 



ONTARIO LAW REPORTS. 



93 



did not know anything about the will. He was not actuated one 
way or the other, but for the best interests of the man himself 
and of these two women that were there; and he says that it was 
impossible for those women with any degree of propriety to stay 
there. It was indelicate and inadvisable; and it was much 
better in every way that this mature woman, a married woman, 
should come in; and she proved an admirable success, but they 
retained the control of affairs ; they did not abandon the .old man 
or leave him to the tender mercy of casual strangers, as was said. 
They were there once or sometimes twice a week. They attended 
to the operation of shaving him, a confidential performance, 
and were brought close to him, in touch with him in a most familiar 
way, so that he was with them all along at intervals, although he 
knew that they were not there continuously, and in his saner 
moments he may have appreciated the reason of their not being 
there; but he was content with the arrangement; he made no 
objection; he went on and consented to Mrs. Mutton being 
housekeeper and to their coming in in that way from time to time 
all through. Now, he knew what the conditions were in his will, 
and he made no objection to this state of affairs as indicating 
that they were not carrying out what he intended they should do in 
order to enjoy this legacy. I rather think, upon the fair con- 
struction of the evidence, that there was a sufficient performance 
within the meaning of the terms of the will, having regard to the 
flexibility of it and the consent which he might give to both of 
them being absent. I do not finally pass upon this until I look 
at the cases, and on the other point as well as this. It may be 
that the other point is fatal. However that is, I will reserve 
judgment on the whole case. 

True it is that ignorance by the beneficiary of a condition 
annexed to a gift by will does not protect the devisee from the 
consequences of not complying therewith: Astley v. Earl of Essex 
(1874), L.R. 18 Eq. 290. 

There is a good deal to be said in favour of the view presented 
by the defendants’ counsel that the conduct of the testator, his 
words and acts in regard to his nieces and in their presence, were 
so fraught with sexual aberration as to render the requirement 
of residence with him one contra bonos mores, within the meaning 
of Brown v. Peck (1758), 1 Eden 140. This, of course, does not 



Boyd, C. 

1912 

Adams 

v. 

Gotjrlay 



94 



ONTARIO LAW REPORTS. 



Boyd, C. 

1912 

Adams 

v. 

Gourlay 



1912 

March 27. 



[VOL. 



appear upon the face of the condition, and requires to be established 
(as it was established) by the evidence. This conduct would 
absolve them from continuous residence and would justify their 
having him cared for, as they did, by a married woman and her 
husband, who were able to control the testator; so that, in equity, 
the testator himself worked a discharge of the conditions. 

I still think that there was a substantial performance of the 
condition by the nieces; and, if so, by the application of the 
cy-pres doctrine, the condition has been practically satisfied. In 
Williams on Executors, assent is given to the law found in Story’s 
Equity Jurisprudence, that “where a literal compliance with the 
condition becomes impossible from unavoidable circumstances, 
and without any fault of the party, it is sufficient that it is com- 
plied with as nearly as it practically can be, or as it is technically 
called ‘cy-pres:’” Williams, 10th ed., p. 1013, note (e). 

But, in view of my decision upon the status of the plaintiff, 
I do not further pursue the inquiry on this branch of the case. 

The action should stand dismissed; but I would give no costs 
against the plaintiff unless she appeals. Costs out of the estate 
to the defendants in any event. 



[BOYD, C.] 

Huegli v. Pauli. 

Church — Property Rights — Religious Institutions Act, 36 Viet. ch. 135, 
secs. 7, 19 — Construction — Deed of Conveyance of Church Site to Trus- 
tees — Special Trusts not Affected by Statute — Erection of Meeting- 
house — Subsequent Abandonment — Removal to New Building < — Effect 
as to Continuity of Beneficiary — Sale of Old Site and Building — Reso- 
lutions of Congregation — Breach of Trust — Status of Plaintiffs to Com- 
plain — Former Members of Congregation — Status of Minister of New 
Congregation — “Duly Authorised ” — Congregational System of Church 
Government — Class Action — Amendment — Remedy for Breaches of 
Trust. 

In 1874, a congregation of the Evangelical Lutheran denomination pur- 
chased land in the town of Stratford as a site for a house of public 
worship, and the land was conveyed to trustees for the congregation. 
The recitals in the conveyance shewed that it was obtained under the 
powers conferred upon religious societies by the Act then in force respect- 
ing the property of religious institutions, 36 Viet. ch. 135(0.), which 
provides (sec. 19, now sec. 23 of R.S.O. 1897, ch. 307) that “in every 
case the special trusts or powers of trustees contained in any . . . 

conveyance . . . shall not be affected or varied by any of the pro- 
visions of this Act.” Section 7 of the Act gives power to sell the land 



XXVI. 



ONTARIO LAW REPORTS. 



95 



when it becomes unnecessary to be held for the religious use of the con- 
gregation, and it is deemed advantageous to sell. The recitals shewed 
also that a then existing religious society or congregation of Evangelical 
Lutherans had occasion for the land purchased and conveyed as a site 
for a house of public worship, and had appointed three persons (the 
trustees to whom the conveyance was made) to hold in perpetual suc- 
cession, under the name of “The Trustees of the Stratford Evangelical 
Lutheran Church,” for the use of the said society and upon the trusts 
thereinafter set forth. There were two special trusts: first, that the 
premises should be forever thereafter held for the use of the members of 
an Evangelical Lutheran Church; and, second, “that the trustees shall 
at all times hereafter permit any minister, he being duly authorised by 
the said Evangelical Lutheran Church to conduct the worship thereof, 
to officiate in the church existing or which may hereafter be built on the 
said lot according to the ritual ... of the said church, and shall 
also apply the rents and profits derived from any portion of the said lot 
or the buildings erected thereon towards the maintenance of public 
worship in the said church or meeting-house, according to the rules . . . 
or towards the repairs or improvement of the said property, and to no 
other purpose whatsoever.” The conveyance also provided that when 
the church for which the “trust was created shall lose its visibility and 
cease to exist,” the control of the property should pass over to and vest 
in the nearest Evangelical Lutheran 'Church of the same faith and 
order. The original society built and took possession of a meeting-house 
on the land so conveyed, and occupied the place for religious uses until 
December, 1908; when the congregation moved into a new building upon 
another site, it having been previously resolved (practically unanimously) 
by the congregation, at meetings held for the purpose, that a new lot 
should be bought and a new building put up, and that the old lot and 
building should be sold. After vacating the old site, the trustees, acting 
on the direction of the congregation, rented the old building, and applied 
the surplus of rent, after paying taxes and insurance, for the benefit of 
the congregation and of the new site. The trustees also, in like man- 
ner, sold four feet of the land, and were offering the rest for sale. In 
February, 1911, the plaintiffs and others began a movement for the 
establishment of a new congregation of Evangelical Lutherans in Strat- 
ford. One of the plaintiffs was a dissident member of the original 
society, the only one who had objected to the purchase of the new site 
and the sale of the old; and another (the plaintiff H.) was a minister 
of the denomination in good standing, who had been called to Stratford 
for the purpose of organising the new movement. He became the pastor 
of a new society, worshipping in a hall ; and this newly organised body, 
containing a few members of the original society, applied for leave to 
enter upon the old site; and, that being refused, in February, 1912, 
brought this action against the trustees of the new site and building 
(the successors of the original grantees), claiming and practically ad- 
mitted to be the legal owners of the old site, for a mandatory order 
upon the defendants to enforce the re-opening of the old building for 
public worship, and to allow the plaintiff H. to conduct public worship 
therein, and for a declaration to have the trusts of the deed carried into 
execution, and to have the sale stayed and the rents applied under the 
trust to the old site: — - 

Held, that the situation, provided for in the deed, of the church for which 
the trust was created losing its vitality and ceasing to exist, had not 
arisen: the vacating of the old site was not equivalent to the cesser of 
existence of the beneficiary. 

Held, also, that the effect of sec. 19 of the Act (now sec. 23) is to forbid 
the nullification of the special trusts of the deed; and, by the terms of 
the deed, the land was acquired for the possessory use and benefit of the 
congregation, and was to be maintained and improved in perpetuity; 
the trust inhered in the title, and so passed to the successive trustees 
indefinitely in futuro — not to be interrupted by a sale out and out. 



1912 

Huegli 

V. 

Pauli 



96 



ONTARIO LAW REPORTS. 



1912 

Huegli 

V. 

Pauli 



[VOL. 

Held, however, that, as the organisation of the church described in the 
deed was upon the Independent or Congregational system, the view of 
the majority prevailed; the organised body had power to change the 
place at which its services should be conducted and to change its name; 
the resolutions to vacate the old site and to sell or rent it were matters 
of congregational competence, and were conclusive as against the plain- 
tiffs. The identity of the beneficiary church was established in favour 
of the body represented by the defendants; and such of the plaintiffs 
and those whom they represented as were members of the original 
body, had, by leaving it, ceased to be a part of it, and had no right as 
former members to claim any part of the trust property. 

Held, also, that the plaintiff H., although in good standing as a minister 
of the general body, was not one “duly authorised by the said Evan- 
gelical Lutheran Church to conduct the worship thereof:” the context 
shewed that the source of authority was to be sought, not in the de- 
nomination at large, but in the particular body or church representing 
the original congregation. 

Held, also, that no amendment enabling the plaintiffs to sue on behalf of 
others who sympathised with them — which was essential in order that 
no incongruity in the class represented might arise — would better the 
cause of action; the legal title was in the defendants, and no breach of 
trust had arisen in regard to which the plaintiffs had a right or an in- 
terest to complain. 

Semble, that the defendants’ breaches of trust might be investigated by the 
intervention of the Attorney-General and a competent relator. 

Action for a mandatory injunction requiring the defend- 
ants, the trustees of an Evangelical Lutheran Church in the town 
of Stratford, to reopen for public worship their disused church- 
edifice, and to allow the plaintiff Huegli to conduct services 
therein; for a declaration that the plaintiffs were entitled to 
have the trusts of the deed of the land upon which the building 
stood carried into execution; for an injunction restraining the 






defendants from leasing or selling the building or the land and 






from using or allowing it to be used for purposes other than 
those declared in the trust deed; and for other relief. 



March 20 and 21. The action was tried before Boyd, C., 
without a jury, at Stratford. 

F. H. Thompson , K.C., for the plaintiffs. 

R. S. Robertson, for the defendants. 

March 27. Boyd, C. : — This is a church case, not involving 
questions of doctrine, but only those of property. All the liti- 
gants are of the Evangelical Lutheran denomination, holding 
the doctrines set forth in the unaltered Augsburg Confession, 
and both parties claim conflicting rights under one and the same 
deed of trust. 

The plaintiffs’ statement of case appears simple; but, upon 



XXVI. ] 



ONTARIO LAW REPORTS. 



97 



the development of the facts at the trial, questions arise of 
difficult and complicated character which have not been con- 
sidered by our Courts. I do not purpose to deal with more than 
are necessary to determine this action. Three plaintiffs are on 
the record, but at the hearing they asked leave to sue ‘ ‘ on behalf 
of others.” An initial difficulty arises as to “who are the 
others?” That remains as yet undefined. The defendants are 
alleged to be and are the trustees of the legal estate in the 
church property in question, and breaches of trust are com- 
plained of. No doubt, the rule is well settled that a member of 
the society may sue on behalf of himself and all the members of 
that society to prevent a breach of trust ; or it may be that, if 
he stands alone, he may sue in his own name for an injunction ; 
but it must appear that he has a legal interest to intervene. So 
I pass for the present from the question of parties and the 
locus standi of the plaintiffs. 

The trust property was acquired in July, 1874, by convey- 
ance in fee simple from Alexander Grant, of Stratford, for an 
expressed consideration of $200. The conveyance is made to 
three persons appointed to be trustees (under the statute then 
in force, 36 Yict. ch. 135(0.), respecting the property of religi- 
ous institutions), for the purposes therein set forth. The recitals 
shew that a then existing religious society or congregation of 
Evangelical Lutherans had occasion for the land purchased and 
conveyed as a site for a house of public worship, and had ap- 
pointed three persons to hold in perpetual succession, under the 
name of “The Trustees of the Stratford Evangelical Lutheran 
Church,” for the use of the said society and upon the trusts 
thereinafter set forth. 

There are two “special trusts” (to use the phrase of the 
deed) : first, that the premises shall be forever hereafter held 
for the use of the members of an Evangelical Lutheran Church, 
which shall be exclusively composed of persons holding the 
doctrines of the said Augsburg Confession; and, second, “that 
the trustees shall at all times hereafter permit any minister, he 
being duly authorised by the said Evangelical Lutheran Church 
to conduct the worship thereof, to officiate in the church existing 
or which may hereafter be built on the said lot according to 



Boyd, c. 

1912 

Huegli 

V. 

Pauli 



1 — XXVI. O.L.R. 



98 



ONTARIO LAW REPORTS. 



Boyd, C, 

1912 

Huegli 

V. 

Pauli 



— — ^ uing. [VOL. 

the ritual ... of the said Church, and shall also apply the 
rents and profits derived from any portion of the said lot or 
the buildings erected thereon towards the maintenance of public 
worship in the said church or meeting-house according to the 
rules ... or towards the repairs or improvement of the 
said property, and to no other purpose whatsoever. ’ ’ 

It is to be noted that the word “ church ” is used in two 
senses in different parts of the conveyance,; at times referring to 
the religious society, and again to the particular meeting-house 
on the premises. 

The recitals shew that the conveyance was obtained under 
the powers conferred upon religious societies by the provincial 
statute then in force, 36 Viet. ch. 135, sec. 19, which provides 
that “in every case the special trusts or powers of trustees 
contained in any deed, conveyance, or other instrument, shall 
not be affected or varied by any of the provisions of this Act.” 
That clause is carried into the latest revision of the same Act 
(R.S.O. 1897, ch. 307, sec. 23). This Act gives power to sell the 
land when it becomes unnecessary to be held for the religious 
use of the congregation, and it is deemed advantageous to sell, 
etc. : sec. 7 of 36 Viet. ch. 135. 

This original society built and took possession of a meeting- 
house on the said land, and occupied the place for religious uses 
down to the 13th December, 1908, when the premises were 
vacated under the following circumstances. 

The congregation was growing from year to year, and it 
became a question whether the old building should be repaired 
and extended or another site should be procured and a new 
building erected. 

By the record in the church minutes it was, on the 17th 
December, 1906, resolved unanimously that a new church 
should be erected. There was some fluctuation of opinions and 
of resolutions as to the locus ; but finally it was moved and 
carried at a meeting of the congregation held on the 24th Janu- 
ary, 1908, that a new lot should be bought, and on the 28th 
August of the same year that the old lot should be sold. This 
vote also appears to be practically unanimous, only one person 
(who is one of the plaintiffs, Allstadt) voting “nay.” 

The new building being put up on the new lot, the congrega- 



XXVI.] 



ONTARIO LAW REPORTS. 



99 



tion as a whole took possession of the new building, in Erie 
street, on the 13th December, 1908, when the new meeting- 
house was formally opened. There does not appear to have been 
what is called a “split” in the society. Some members may 
have been reluctant or inert, but only the one who voted “nav M 
upon the question of sale is in evidence as being actively dis- 
sident. The pastor of the society that moved into the new build- 
ing says, “Practically the whole congregation went with me.” 
He names the plaintiff Allstadt as the only exception. Another 
plaintiff, Racey, was active in support of the new movement, 
and voted in favour of it at the meeting. 

After vacating the old site, the trustees, acting on the 
direction of the congregation, rented the building thereon, and 
applied the surplus of rent, after paying taxes and insurance, 
for the benefit of the congregation and of the new site. The 
trustees also, in like manner, sold four feet of the land, and are 
now offering the rest for sale. The trustees of the Erie street 
lot (now defendants) claim to be the legal owners of the old 
site; and this is not in effect questioned by the plaintiffs in 
the present case. The object of the suit is to restrain the sale 
and to get a right of entrance to the old building (which is in 
Cambria street) in order to make use of it for religious services, 
in the interest of a body of people represented by the plain- 
tiffs. This movement in regard to the new body began in Febru- 
ary, 1911, by the forwarding of a petition with twelve signa- 
tures to the plaintiff Huegli, who is an Evangelical Lutheran 
clergyman of the Synod of Missouri, and in good standing as a 
member of that iSynod, inviting him to take up ministerial work 
in Stratford. He came, and a hall was rented On Downey 
street, and there he began to organise a congregation, and was 
joined by the plaintiffs Racey and Allstadt and two or three 
others who had been members of the congregation worshipping 
in Cambria street, and also by some outsiders, aggregating in all 
about twenty members — the whole number of present adherents 
in Downey street hall being about one hundred. 

To go back now to an analysis of the petitioners and their 
standing in the Cambria street church at the time it was re- 
solved to build a new meeting-house on another site, we find 



Boyd, C. 

1912 

Huegli 

v. 

Pauli 



100 



ONTARIO LAW REPORTS. 



Boyd, C. 

1912 

Huegli 

V. 

Pauli 



[VOL. 

that five of these were not members of the old church ; one, Hem- 
bruch, was not in good standing since 1906, and had no right to 
vote in the old church; and of the remaining six, Homan at- 
tended the Erie street meetings for a while; Schroeder sub- 
scribed for the building of the new church, and became liable on 
the bond for its debt, and also attended at Erie street for a 
while; Wolf subscribed towards the new building and went over 
with the majority; Redding is now a member of the Erie street 
church and in good standing (i.e., making his payments, etc.) ; 
Racey went over with the rest to Erie street church, and, as 
has been stated, was an active advocate of the change ; and the 
last of the twelve, Allstadt, is the only one who has opposed 
and stood aloof from the new movement. 

The situation as it has been developed is not provided for 
in the four corners of the deed of trust. Only two conditions 
are there dealt with: (1) when all is going on in due course by 
the occupation and religious use of the trust property by the 
congregation of the Stratford Evangelical Lutheran Church; and 
(2) when the church for which the “ trust was created shall lose 
its visibility and cease to exist” — then the control of the pro- 
perty is to pass over to and vest in the nearest Evangelical 
Lutheran Church of the same faith and order. 

The action is framed on the theory that this second situa- 
tion has arisen — by assuming that the vacating of the old site 
is equivalent to the cesser of existence of the beneficiary. This 
proposition cannot, it seems to me, be sustained. The church 
in possession under the deed of trust has, for sufficient reasons, 
decided no longer to remain on the trust property ; and the ques- 
tion as to what is to be done with that property cannot be solved 
by reference to this latter provision in the deed of trust. 

The newly organised body, containing a few members of 
the former church society, has applied for leave to enter upon 
the old site, by notice about the 12th April, 1911; and, failing 
to get satisfaction, this action is brought on the 1st February, 
1912, seeking a mandatory order on the defendants to enforce 
the reopening of the church and to allow the plaintiff Huegli to 
conduct public worship therein, and for a declaration to have 
the trusts of the deed carried into execution, and to have the 
sale stayed and the rents applied under the trust to the old site. 



XXVI.] 



ONTARIO LAW REPORTS. 



101 



By the terms of the deed, the land is held on the special 
trusts that the same shall be forever held and enjoyed for the 
use of the members of an Evangelical Lutheran Church, and 
that the rents, etc., shall be applied to repairs and improve- 
ment of the said property, and to no other purpose whatsoever. 

The plaintiffs’ broad contention is, that the lands cannot be 
sold and that the rents (if any) cannot be diverted from the 
perpetual purpose of repairing and improving the trust pro- 
perty. They claim to represent some of the beneficiaries, being 
members of the original congregation for whose use and benefit 
the trust was created, and that the majority cannot by any vote 
or action overrule and extinguish their rights and claims. 

The broad contention of the defence is, that there is no pri- 
vate right of action; that the beneficiary is the society or con- 
gregation, and not any individuals of it ; and that the society as 
a whole is represented by the Erie street church. As to the 
sale and the application of the rents, they invoke the benefit of 
the statute referred to in the deed; and say that, even if the 
rents were misapplied, it is a grievance to be complained of 
by the Attorney-General, and not by the plaintiffs. 

This Act, no doubt, provides for the sale and leasing of church 
lands when it becomes unnecessary to retain them for religious 
use, upon the consent being obtained of a majority of the 
members present at a meeting duly called for that purpose ; 
and, so far as all necessary preliminaries are concerned, this 
place may well be sold or leased if the Act applies. But the 
plaintiffs rely on sec. 19 of the Act (sec. 23 of the present Act), 
which provides that in every case the special trusts or powers of 
trustees contained in any deed shall not be affected or varied 
by any of the provisions of the Act. In this deed we find ex- 
pressed as “ special trusts:” (1) that the land shall be forever 
hereafter held and enjoyed for the use of the members of an 
Evangelical Lutheran Church; and (2) that the rents and profits 
derived from any portion of the said parcel of ground or the 
building erected thereon shall be applied towards the mainten- 
ance of public worship in the said church or meeting-house, to- 
wards the repairs and improvement of the said property, and 
for no other purpose whatsoever. This last special trust is 



Boyd, C, 

1912 

Huegli 

V . 

Pauli 



102 

Boyd, C. 

1912 

Huegli 

V. 

Pauli 



ONTARIO LAW REPORTS. [vol. 

peculiarly emphatic in being impressed on the very place and 
the building (the meeting-house) thereon. 

Unless I can nullify these special trusts, the land cannot 
be sold or the rents diverted to another place. And, as I read 
the statute, it forbids the nullification of these special trusts. 
The effect of this statute has not been considered; I believe, by 
the Courts in the aspect now presented. The aim of the Legis- 
lature appears to be to give a right of alienation to a religious 
body holding lands by trustees capable of perpetual succession. 
The statute leaves out cases of special trust and deals with 
lands held by the corporation on the general trust or obligation 
of using the property for the purposes contemplated at its 
creation. 

Apart from special restraining trusts, when the body 
outgrows its building, and the majority decide that it has become 
necessary and advantageous to dispose of the property with a 
view of removing to a more convenient situation, then the 
statute promotes the benefit of the body by sanctioning such a 
course ; and a sale so had, which is a conversion of the present 
property, cannot be regarded as a diversion or a breach of trust. 

But, if words are found in the conveyance which forbid a 
change of site, the statute does not mean to violate that term of 
the contract, but lets the parties abide by the bargain they 
have made when the property was acquired. By the terms of 
this deed, the land is bought for the possessory use and benefit 
of the particular local church as a congregation, and is to be 
maintained and improved in perpetuity. The rents and profits, 
if any, are to be invested in the meeting-house and otherwise 
on the particular site ; the congregation is tied down to that spot 
as their place of worship so long as the congregation exists. In 
brief, the trust inheres in the title, and so passes to the succes- 
sive trustees indefinitely in future > — not to be interrupted by a 
sale out and out. This is my reading of the statute and of this 
trust deed — but the result does not enure to the benefit of the 
plaintiffs. 

Now the present trustees, the defendants, hold this land 
in trust for the particular church so long as it exists and can be 
traced and identified. The Stratford Evangelical Lutheran 



XXVI.] 



ONTARIO LAW REPORTS. 



103 



Church of the deed had power to change the place at which its 
services should be conducted and also to change its name to that 
of the “Erie Street Church.” These changes of local habitation 
and name are matters of ecclesiastical concern and cognizance, 
with which the Courts have nothing to do. The organisation 
of this particular church is based on the Independent or Con- 
gregational system, in which the voice of the majority of the 
members prevails. The minority, however small or large, is out- 
voted by the action of the majority, and the resolutions to vacate 
the old place, to sell or rent it, and to move into a new building 
on a new site, are all matters of congregational competence, and 
are conclusively settled as against the plaintiffs. The identity of 
the beneficiary church is established in favour of the body repre- 
sented by the trustees, the defendants. The few who went out 
and banded themselves together with others in a new organisa- 
tion, worshipping in the Downey street hall, are an offshoot 
from the old body, but thereby have ceased to be a part of it, 
and can have no right as once members of the original body to 
claim any part of the property vested in *the trustees for that 
original body: see per Dickerson, J., in Newburgh Associate Re- 
formed Church Trustees v. Princeton Theological Seminary 
Trustees (1837), 4 N.J. Eq. 77, and Pine Hill Lutheran Con- 
gregation Trustees v. St. Michael’s Evangelical Church of Pine 
Hill (1864), 48 Pa. St. 20. 

That appears to be the situation as regards the religious or 
ecclesiastical aspect of this controversy. None of the plaintiffs is 
a corporator or beneficiary because not a member of the old 
church. But that leaves untouched the consequences of this 
congregational act of removal in a legal point of view, as affected 
by the legal breaches of trust begun in part and in process of 
consummation by the sale of the land. 

It may be well now to deal with the plaintiff Huegli, who is 
an outsider (so to speak) and stands alone in his claim. Assum- 
ing the non-existence of the church, the plaintiffs invoke that 
part of the deed which provides that, if the church loses its 
visibility, the land forthwith vests in the trustees of the nearest 
Evangelical Lutheran Church, which in this case happens to be 
the Erie Street Church, and the defendants the trustees. If 



Boyd, 0. 

1912 

Huegli 

v. 

Pauli 



104 

Boyd, C. 

1912 

Huegli 

V. 

Pauli 



ONTARIO LAW REPORTS. [vol. 

so vested with the land in this character, the deed provides that 
the trustees shall be under obligation to open the church for 
regular or occasional services to any minister or missionary of 
the Evangelical Lutheran denomination holding the doctrinal 
views of the Augsburg Confession aforesaid. This requirement 
is fulfilled by Mr. Huegli, who is in good standing as a member 
of the Synod of Missouri, and is presented by the newly organ- 
ised church on Downey street as a fit and proper person to be 
inducted for the time being in connection with the services to 
be resumed on the site owned by the defendants. The differ- 
ence between this part of the trust and that which relates to 
the regular services held when the building is occupied by the 
original church is, that in the latter case the clergyman who has 
the right of entree is one “duly authorised by the said Evange- 
lical Lutheran Church to conduct the worship thereof. ” The 
context shews that the source of authority is to be sought, not in 
the denomination at large, extending over the continent, but in 
the particular body or church representing the original con- 
gregation. There being no lack of existence or of visibility of 
this latter body, the plaintiff Huegli is a clergyman not 
competent to officiate, whose claim to conduct the services in 
the old building may well be vetoed by the trustees. So that, 
to put it shortly, the plaintiffs, who complain of a breach of 
trust by the trustees, propose to enforce against them an occu- 
pancy of the site which would be a further breach of trust. 
Upon the ecclesiastical side, the old church body worshipping 
close by in Erie street regards this move as an attempt to estab- 
lish a rival church in their proximity for no sufficient cause. 

No amendment enabling the plaintiffs to sue on behalf of 
others who sympathise with them — and this is essential in order 
that no incongruity in the class represented may arise — no such 
amendment would better the cause of action. The legal title is 
in the defendants, and no breach of trust has arisen in regard to 
which the plaintiffs had a right or an interest to complain. The 
breaches of trust must be investigated by another method, pro- 
bably by the intervention of the Attorney-General and a com- 
petent relator; but on that I do not decide. The only possible 
way of reparation to cure the breaches would be for the Zion 



XXVI.] 



ONTARIO LAW REPORTS. 



105 



Church to retrace their steps, resume possession, and re-estab- 
lish worship on the old site ; but I suppose it is now too late for 
that remedy. It may be that the real solution of the difficulty is 
to resort to the Legislature and procure special legislation, 
which may quiet, if not satisfy, all concerned. 

The action must be dismissed; but costs will not be given, 
considering that the question discussed is new and bare of prece- 
dent, and that the conduct of the defendants has not been ac- 
cording to law, however honestly undertaken. 



[TEETZEL, J.] 

Kennedy v. Kennedy. 

Will — Construction — Gift for Maintenance of Residence — Perpetuity — In- 
testacy — Trust — Discretion of Trustees — Bona Fides — Power to Sell 
Lands — Conveyance Free from Charge of Annuity — Charge on Proceeds 
of Sale. 

Any gift, not being charitable, the object of which is to tie up property for 
an indefinite time, is void. 

The testator devised his dwelling-house and lands and the chattels therein 
and thereon (except a number specifically bequeathed) to his son, the 
defendant J. H. K., but subject to certain provisions as to rights of occu- 
pation, etc., in favour of two granddaughters. He made other bequests; 
and then gave the residue of his estate to his executors and trustees “to 
be used and employed by them in their discretion or in the discretion of 
a majority of them in so far as it may go to the maintenance and keep- 
ing up my house and premises herein bequeathed to my son J. H. K. 
with full power and authority to them to make sales of any real estate 
upon such terms and conditions and otherwise as may be expedient and 
to execute all deeds documents and other papers necessary for the sale 
of same and to make title thereto to any purchaser thereof and the pro- 
ceeds of such sales to devote as in their discretion or in the discretion 
of a majority of them may seem meet and necessary to keep up and 
maintain my said residence in the manner in which it has been hereto- 
fore kept and maintained and if for any reason it should be necessary 
that the said residence should be sold and disposed of I direct upon any 
such sale being completed that the residuary estate then remaining shall 
be divided in equal proportions among the several pecuniary legatees 
under this my will:”' — 

Held, that the gift of the residue was void as creating or tending to create 
a perpetuity; and that there was an intestacy as to the whole of the resi- 
due. 

Thomson v. Shakespear (1860), 1 De G. F. & J. 399, Came v. Long (1860), 
2 De G. F. & J. 75, Yeap Cheah Neo v. Ong Cheng Neo (1875), L.R. 6 
P.C. 381, and Rickard v. Rohson (1862), 31 Beav. 244, applied and fol- 
lowed. 

Semble, that, although the trust was in its nature imperative, and the 
amount to be expended was left in the discretion of the trustees, they 
could not at once appropriate the whole fund, regardless of the amount 
thereof and the amount necessary to be expended, for the benefit of the 
owner of the dwelling-house, the defendant J. H. K. ; the trust must be 
executed in good faith. 

8 — XXVI. O.L.R. 



Boyd, C. 

1912 

Huegli 

v. 

Pauli 



$ 

1912 

March 28. 



106 



ONTARIO LAW REPORTS. 



1912 

Kennedy 

15 . 

Kennedy. 



[you 



Held, also, that the wide power of sale vested in the trustees enabled them 
to make title to lands embraced in the gift of the residue free from a 
charge of an annuity thereon in favour of the plaintiff; but the proceeds 
of sale would be subject to the charge. 

The plaintiff, one of the next of kin of David Kennedy, de- 
ceased, brought this action to obtain a construction of the will of 
the deceased, and for a declaration that the gift therein to the 
trustees to keep up and maintain the residence of the testator 
was void as tending to create a perpetuity. 

March 5. The action was tried before Teetzel, J., without 
a jury, at Toronto. 

J. Bicknell, K.C., and W. A. Baird, for the plaintiff and the 
defendants Robert Kennedy and Joseph H. Kennedy. 

E. D. Armour, K.C., and A. D. Armour, for the defendant 
James H. Kennedy. 

W. M. Douglas, K.C., for the defendants the Suydam Realty 
Company and Henry Suydam. 

T. P. Galt, K.C., A. J. Bussell Snow, K.C., and W. A. Proud- 
foot, for the other defendants. 



March 28. Teetzel, J. : — The principal question for deter- 
mination is, whether or not a provision contained in the will of 
David Kennedy, deceased, is good, or void as creating or tending 
to create a perpetuity. 

The clause containing the provision in question reads as 
follows : — 

‘ ‘ The rest residue and remainder of my estate both real and 
personal I give devise and bequeath to my executor executrices 
and trustees aforesaid to be used and employed by them in their 
discretion or in the discretion of a majority of them in so far 
as it may go to the maintenance and keeping up my house and 
premises herein bequeathed to my son James Harold Kennedy 
with full power and authority to them to makes sales of any real 
estate upon such terms and conditions and otherwise as may 
be expedient and to execute all deeds documents and other 
papers necessary for the sale of same and to make title thereto 
to any purchaser thereof and the proceeds of such sales to de- 
vote as in their discretion or in the discretion of a majority of 
them may seem meet and necessary to keep up and maintain my 



XXVI.] 



ONTARIO LAW REPORTS. 



107 



said residence in the manner in which it has been heretofore 
kept and maintained and if for any reason it should be necessary 
that the said residence should be sold and disposed of I direct 
upon any such sale being completed that the residuary estate 
then remaining shall be divided in equal proportions among the 
several pecuniary legatees under this my will. ’ ’ 

This clause and other parts of the will have been the subject 
of much judicial consideration during the last three years, be- 
ginning with Kennedy v. Kennedy (1909), 13 O.W.R. 984, and 
in Kennedy v. Kennedy (1911), 24 O.L.R. 183, and Foxwell v. 
Kennedy (1911), 24 O.L.R. 189; the last pronouncement being 
an unreported judgment of the Chief Justice of the Common 
Pleas, in January last, in Foxwell v. Kennedy, on the counter- 
claim of the defendants the Suydam Realty Company and Henry 
Suydam, decreeing in their favour specific performance of a 
contract for the sale of a portion of the residuary estate in con- 
sideration of $97,000.* 

By the judgment in Kennedy v. Kennedy, reported in 24 
O.L.R. 183, it was held by Mr. Justice Latchford that the pro- 
vision in the above clause in favour of the pecuniary legatees was 
void, on the ground that it created a perpetuity. This judgment 
was affirmed by a Divisional Court (p. 189 of the same volume) ; 
and a judgment of mine in Foxwell v. Kennedy, formally adopt- 
ing the judgment of my brother Latchford, was affirmed by a 
Divisional Court (p. 198 of the same volume). 

The plaintiff is one of the next of kin of the testator, and in 
this action claims, not only that the gift of what may remain 
of the residuary estate, but also that the gift in its entirety to 
the trustees to keep up and maintain the residence of the testa- 
tor, is void as tending to create a perpetuity. 

The testator gives his dwelling-house and premises in the 
city of Toronto, together with the chattels therein or thereon 
at the time of his decease, except a number specifically be- 
queathed, to the defendant James Harold Kennedy, “but sub- 
ject nevertheless to the provisions hereinafter made for Gertrude 
Maude Foxwell and Annie Maud Hamilton.” 

*An appeal from this judgment was dismissed by a Divisional Court 
on the 6th May 1912. See 3 O.W.K. 1225. 



Teetzel, J. 

1912 

Kennedy 

v. 

Kennedy. 



108 



ONTARIO LAW REPORTS. 



Teetzel, J. 

1912 

Kennedy 

v. 

Kennedy. 



[VOL. 

The will contains provisions in favour of each of these 
ladies, to the effect that each is given a bed-room suite in a 
specified room in the house, together with the contents and fur- 
nishings thereof, with a right to live in said residence as a home 
as long as she remains unmarried, and to occupy said room with 
free and full ingress, egress, and regress thereto and therefrom, 
with all other privileges, rights, conditions, and conveniences 
necessary to the full enjoyment thereof, but on no condition is 
she to be looked upon to do or to be compelled to do any work or 
have any household duties or responsibilities except to look 
after her own apartment, and a right to remove the chattels 
when she leaves the premises; and his son James Harold Ken- 
nedy is to supply her with a key to the front door, with all neces- 
sary maintenance and board, all of which is expressly made a 
charge upon his residence and premises. 

I think it is plain from all the provisions of the will with 
reference to his residence that the testator’s scheme was to have 
the same maintained as a family residence for these two young 
ladies as long as they lived and for his son James Harold Ken- 
nedy and his family and descendants or whomsoever James 
Harold Kennedy might will or otherwise give the said residence 
to, and that as to such residence it should, until sold and disposed 
of, be kept up and maintained by the trustees and those succeed- 
ing them in the trust in the manner in which it had been kept up 
and maintained by him. 

This being, as I think, the scheme which the testator had 
in his mind, the question for consideration is, whether, in making 
the provision for carrying out that scheme, he has not infringed 
the rule of law against perpetuities. 

As the result of the best consideration I have been able to 
give to the numerous authorities cited in argument and others, 
I am of opinion that the gift in question is void as creating or 
tending to create a perpetuity. I am unable to distinguish this 
case in principle from such cases as Thomson v. Shakespear 
(1860), 1 DeG. P. & J. 399; Came v. Long (1860), 2 DeG. F. & 
J. 75; Yeap Cheah Neo v. Ong Cheng Neo (1875), L.R. 6 P.C. 
381; and Rickard v. Robson (1862), 31 Beav. 244. 









■ 




XXVI.] 



ONTARIO LAW REPORTS. 



109 



In Thomson v. Shakespear, the provision of the will analog- 
ous to the provision in question was, that the testator gave his 
trustees £2,500 “to he laid out by them as they shall think fit, 
with the concurrence of the trustees of Shakspeare’s house, 
already sanctioned by me, in forming a museum at Shakspeare ’s 
house, in Stratford, and for such other purposes as my said 
trustees in their discretion shall think fit and desirable for the 
purpose of giving effect to my wishes. ’ 9 In that case, as in this, 
the money was taken out of the estate, and was directed to he 
spent for the maintenance of the premises, and the period over 
which the expenditure should extend was likewise indefinite, and, 
not being for a charity, was held to be void as in violation of the 
rule against perpetuities. 

In Came v. Long, the testator gave his mansion house and 
premises, with the appurtenances thereunto belonging, unto the 
trustees for the time being of the Penzance Public Library, to 
hold to them and to their successors forever for the use, benefit, 
maintenance and support of the said library. The Lord Chan- 
cellor in giving judgment in that case said (p. 79) : “My objec- 
tion to it is, that it tends to a perpetuity. . . The clear 

intention of the testator, as expressed by the will, is, that 
this should be a gift in perpetuity to this institution at 
Penzance. The gift is to the trustees for the time being of the 
society and their successors, to be held by them and their suc- 
cessors for ever, they holding it for the use, benefit, mainten- 
ance and support of the library. If the devise had been in 
favour of the existing members of the society, and they had been 
at liberty to dispose of the property as they might think fit, then 
it might, I think, have been a lawful disposition and not tending 
to a perpetuity. But looking to the language of the rules of this 
society, it is clear that the library was intended to be a perpetual 
institution, and the testator must be presumed to have known 
what the regulations were. By one of these it is provided, that 
the society is not to be broken up so long as ten members remain. 
The devise, therefore, is for the benefit of a subsisting society, 
and one which is intended to subsist so long as ten members 
remain, and the property comprised in the devise is therefore 
to be taken out of commerce and to become inalienable, not 
for a life or lives in being and twenty-one years afterwards, but 



Teetzel, J. 

1912 

Kennedy 

v. 

Kennedy. 



110 



ONTARIO LAW REPORTS. 



Teetzel, J. 

1912 

Kennedy 

v. 

Kennedy. 



[VOL. 



for so long as ten members of the society shall remain. This 
seems to me a purpose which the law will not sanction as tend- 
ing to a perpetuity.” 

Now, in this case, the testator in effect says that his trustees 
shall spend such sums out of his residuary estate as they may 
deem necessary to keep up and maintain his residence until 
it is sold and disposed of ; and, while such keeping up and main- 
tenance is for the benefit of James Harold Kennedy and those 
who may succeed him as devisees and donees, they have no con- 
trol over or power of disposition of the residue not appropriated 
by the trustees to keeping up and maintaining the residence. 
Nor have they the power, upon selling the residence, to dispose 
of any part of the fund set aside for its maintenance. 

In the case reported in L.R. 6 P.C. 381, a gift “of the upper 
storey of four specific houses or shops, to be occupied by the 
several members and descendants of K.S.C. and L.K.W. as 
already proposed,” that is, as the context shewed, as a family 
house for the use of two separate families, was held to be void 
for uncertainty, and as denoting an intention to create a 
perpetuity. 

The analogy in this case is not, of course, the giving of this 
residence for the occupation of the son James Harold and the 
two ladies, but for its perpetual maintenance or until “it should 
be necessary that the said residence should be sold and disposed 
of.” 

In Rickard v. Robson , it was held that a bequest of money, 
the interest of which was to be applied in keeping up the tombs 
of the testator and of his family, is void as a perpetuity. It is 
difficult to draw a distinction between a provision for keeping 
up a tomb as a resting place of the deceased members of the 
family and a provision for the indefinite keeping up of a resi- 
dence as a habitation for the living members of the family. See 
also Hoare v. Osborne (1866), L.K. 1 Eq. 585; Fowler v. Fowler 
(1864), 33 Beav. 616. 

In In re Gassiot (1901), 70 L.J.N.S. Oh. 242, a bequest of 
£4,000 to the Vintners Company on condition that they accept a 
bequest of a portrait with certain obligations, and enjoining the 
company out of the income of the £4,000 to keep in due and 
proper repair the portrait, cleaning and regilding its frame not 



XXVI.] 



ONTARIO LAW REPORTS. 



Ill 



less than once in every four years, the surplus income to be 
applied for the benefit of individuals answering a particular 
description, etc., was held to be void as infringing the rule against 
perpetuities. 

See also In re Dutton (1878),. 4 Ex. D. 54. 

I think the general proposition of law to be drawn from the 
above cases is, that any gift, not being charitable, the object of 
which is to tie up property for an indefinite time, is void. 

It seems to me that there can be no question in this case as 
to the indefiniteness of the time during which the residuary 
estate was to be tied up, inasmuch as many generations of owners 
may continue to occupy the residence before the happening of 
the event upon which further expenditures are to cease, i.e., when 
it shall “be necessary that the said residence should be sold and 
disposed of.” 

Nor do I think that, upon a fair interpretation of the testa- 
tor’s language, it can be held that the residue, except such as, 
in the honest discretion of the trustees, it is necessary to expend 
for up-keep and maintenance of the residence according to the 
standard fixed by the testator, is not tied up and taken from 
commerce, within the meaning of the authorities. Neither the 
owners of the residence nor the trustees have any right to dis- 
pose of the fund for any other purpose. The trustees are bound 
to hold the whole fund for the purpose of the up-keep and 
maintenance until the happening of the event when, according to 
the testator’s wish, the residue was to be distributed among his 
pecuniary legatees; and I cannot conceive how the fact that, 
because it has been held that the testator’s wish in that regard 
has been defeated by reason of his language contravening the 
law, any advantage therefrom is to accrue to the owner of the 
residence. 

I am unable to yield to the argument by Mr. Armour, that, 
because the trust is in its nature imperative, and the amount to 
be expended is left to the discretion of the trustees, they can at 
once appropriate the whole fund, regardless of the amount 
thereof or of the necessities for expenditures, for the benefit of 
the present owner, as, by his deed poll (exhibit 4), the defend- 
ant James H. Kennedy, the owner and sole trustee, has attempted 
to do. Like any other trust, it must be executed in good faith ; 



Teetzel, J. 

1912 

Kennedy 

v. 

Kennedy, 



112 

Teetzel, J. 

1912 

Kennedy 

v. 

Kennedy. 



ONTARIO LAW REPORTS. [vol. 

and the Court will exercise its control to prevent a dishonest 
exercise of discretion. Whether or not the defendant James II. 
Kennedy, in the exercise of his discretion as evidenced by the 
deed poll, has acted honestly, I am unable, upon the evidence, 
to say; because the actual amount of the fund in his hands or 
the necessities for up-keep and maintenance were not dis- 
closed in evidence before me; so that, if my judgment 
as to the total invalidity of the gift is not maintained, the 
plaintiff and other next of kin should be at liberty, in another 
action, if so advised, to contest the good faith of James H. Ken- 
nedy in the exercise of the discretion as evidenced by the deed 
poll. 

The whole estate was charged with the payment of an annuity 
of $400 to the plaintiff, and he claims that the lands embraced 
in the residuary gift cannot be sold except subject to that charge. 
In view of the wide power of sale vested in the trustees, it is, I 
think, perfectly plain that they may make title to the purchaser 
free from the charge, but the proceeds will be charged with 

At the trial, I dismissed the action as against the defend- 
ants Suydam and the Suydam Realty Company, but reserved 
the question of costs. I now think that there is no good reason 
why the plaintiff should not pay them. 

The judgment will therefore be : — 

(1) Declaring that the gift of the residue is void as creating 
a perpetuity, and that the lands embraced therein may be sold 
free from the plaintiff’s annuity; declaring that the proceeds of 
the sale are charged therewith; and that, as to the whole resi- 
duary gift, there is an intestacy; reserving to the plaintiff and 
other next of kin, in the event of it being held that my judgment 
is wrong, the right to impeach, in another action, the good faith 
of the defendant James H. Kennedy in the exercise of his discre- 
tion as evidenced by the deed poll. 

(2) That the action be dismissed with costs as against the 
defendant Suydam and the Suydam Realty Company. 

(3) Except as to those costs, the costs of all parties shall be 
paid out of the residuary estate. 



XXVI.] 



ONTARIO LAW REPORTS. 



113 



[IN CHAMBERS.] 

Re Hutchinson. 1912 

Infant — Custody — Habeas Corpus — Right of Father against Maternal March 29. 

Grandparents — Welfare of Child — Agreement under Seal — Adoption — 

1 Geo. V. eh. 35, sec. 3 — Application of sub-sec. ('2) to Father of Child 

■ — Principles of Equity. 

Upon an application, on the return of a habeas corpus, by the father of a 
child under three years of age, for the delivery of the child to him by the 
maternal grandparents: — 

Held, upon the evidence, that, apart from agreement, the interests of the 
child would be better served by leaving her with the grandparents; the 
father having all reasonable access to her. 

Held, also, that an instrument signed and sealed by the father, in view of 
the mother’s impending death, by which the possession, custody, control, 
and care of the child, was placed in the hands of the grandparents, was, 
while it stood, a bar to the father’s application; and it was valid in law 
under R.S.O. 1897, ch. 340, sec. 2 (now 1 Geo. V. ch. 35, sec. 3). 

Re Davis (1909), 18 O.L.R. 384, distinguished. 

Quaere, whether a father is included in the words used in sub-sec. (2). 

Semble, that, apart from the statute, if the agreement were made by the 
father in pursuance of an understanding that the child was to inherit 
the property of the grandparents, and if she were brought up by them 
under that impression, and if that were supplemented by an actual deed 
or will, irrevocable, to such effect, the 'Court, acting on principles of 
equity, would not, at the father’s instance, disturb that arrangement. 

Held, therefore, in the peculiar circumstances of the case, that the custody 
should not be changed. 

Ex p. Templer (1847), 2 Saund. & C. 169, followed. 

Motion by W. H. Hutchinson, the father of Adah May 
Hutchinson, a child of two years, upon the return of a writ of 
habeas corpus , for an order for the delivery of the child to him, 
by the maternal grandparents, the respondents. 

March 26. The motion was heard by Boyd, C., in Chambers. 

W. N. Ferguson , K.C., for the applicant. 

V. A. Sinclair , for the respondents. 

March 29. Boyd, C.: — It is always unsatisfactory to deal 
with disputed facts as set forth in conflicting affidavits. There 
is a mass of material before me, which I have carefully perused, 
and find that there is a cumulation of domestic details on which 
the various deponents contradict each other in an embarrassing 
manner. Disregarding the smaller discrepancies, I should judge, 
despite all the divergent opinions, that there is no danger likely 
to arise to the child, whether she stays with her grandparents or 
goes to her father, in regard to any tubercular infection. Nor 
do I think there is any lack of affection on the part of the father, 



114 



ONTARIO LAW REPORTS. 



[VOL. 



Boyd, C. 

1912 

Re 

Hutchinson 



though it may be he is not so attractive to the child as her grand- 
parents. They have been to all intents in loco parentis to this 
young girl since her birth. The parents of the infant lived in 
the house and home of the maternal grandparents from the date 
of their marriage till the death of the wife on the 7th December, 
1911, with a short interval from April to the middle of July, 
1911, when the parents occupied another house. But during 
these few months the infant was left with the grandparents. 
The child was born in August, 1909, and is yet under three years 
of age — said to be an active, healthy child, yet easily excited and 
needing careful treatment. 



I have no manner of doubt that the child cannot be better 
placed than to be left with the grandparents; they are well to 
do, living in a roomy house, with a large lot, in which the child 
can play. The character of the grandparents is beyond reproach, 
and they stand particularly well in the opinion of the neighbours 
and townsfolk of Tillsonburg. They are devotedly attached to 
the child, as is the child to them, and they have really had every- 
thing to do with and for the child in its sleeping, clothing, main- 
tenance, and personal supervision. The opinion I have formed on 
this head was shared in by the father himself in his conversation 
with Ernest Tretheway, and by Dr. Reid. It is also the opinion 
(for what it is worth) of Mr. and Mrs. Honsberger, who, having 
made affidavits to sustain the father’s claim on the 20th March, 
explain away their statements in later affidavits made on the 25th 
March. 

To hand over the child to the father would be in the nature 
of an experiment; he is a working man, aged about twenty-six, 
with no home at present; he proposes to establish one with the 
assistance of an elder sister, who has been for the last six or seven 
years working in a cutlery company’s works at Niagara Falls, 
New York, and has had experience in looking after children. 
Owing to the scarcity of suitable houses in Tillsonburg, it is not 
likely that the father can do more than get some rooms where the 
child will be in a sense cooped up and with the street for a play- 
ground. The contrast between these prospects, even if the 
household machinery works smoothly, and the advantages pos- 
sessed and now enjoyed by the child, is obvious. 

No question of religion enters in to embitter the situation of 



XXVI.] 



ONTARIO LAW REPORTS. 



115 



the claimants; and I see no good reason why the father should 
not return to the household of the grandparents, as they offered 1912 
to allow him to do after the death of the child’s mother. He says Ke ' 
that he would have done so had they destroyed an agreement Hutchinson 
which he signed on the 4th December, 1911. This is an instru- 
ment under seal, prepared in view of the mother’s impending death, 
so as to place the possession, custody, control, and care of the child 
in the hands of the grandparents, and providing that the .father 
shall have access to the child at all reasonable hours. This instru- 
ment is upheld by the grandparents, but is being attacked in an 
action by the father to set it aside, which is now pending. I 
must regard this at present as a valid agreement which is binding 
on the father. It is not for me, on such material as I have before 
me, to anticipate a decision of the Court on this dispute. I have 
no doubt that the wishes of the dying wife were that the child 
should be left to the care of the grandparents. 

The signed and sealed agreement of the 4th December, while 
it stands, appears to be a bar to any such application as the 
present; and it is valid in law under the statutory provisions in 
1 Geo. V. ch. 35, sec. 3 (0.),* taken from the revised statute in 
force when the deed was executed. But, apart from this agree- 
ment, I think, upon the material placed before me, that the in- 
terests of the child will be better subserved by letting her custody 
remain in statu quo; the father having all reasonable access to the 
child when he so desires; this right of access to be settled by the 
Local Master, if the parties cannot agree. 

In Re Davis (1909), 18 O.L.R. 384, the head-note reads that 
the law of this Province knows nothing of adoption; but the 
attention of the Court was not directed to the Act I have cited, 
and proceeded on the provisions of the Act relating to neglected 

*3. — (1) The father of a child under the age of twenty-one years, 
whether horn at the time of the decease of the father or at the time en 
ventre sa mere, by deed or by his last will and testament in such manner 
and from time to time as he shall think fit, may dispose of the custody and 
education of such child while he remains under the age of twenty-one 
years or for any lesser time to any person in possession or remainder. 

(2) Such disposition shall be good and effectual against every person 
claiming the custody or education of such child as guardian in socage or 
otherwise. 

(3) The person to whom the custody of such child is so committed may 
maintain an action against any person who wrongfully takes away or 
detains him for the recovery of such child and for damages for such 
taking away or detention for the use and benefit of the child, 12 Car. II. 
ch. 24, sec. 8; BJ8.0. 1897, ch. 340, sec. 2. 



116 ONTARIO LAW REPORTS. [vol. 

children, and in particular those that can be called deserted and 
1912 abandoned — which does not apply to this child. 

Rir It may be that the proper reading of the statute is, that the 

Hutchinson declaration that such disposition shall be good and effectual 
against all and every person claiming the custody and tuition of 
the child, does not include a father, if living. But I do not see 
any decided case to that effect. But, apart from the statute, 
if the agreement has been made by the father in pursuance of an 
understanding that the child was to be the heir to or inheritor of 
the property of the grandparents, and has been brought up by 
them under that impression, and if that is supplemented by an 
actual deed or will, irrevocable, to such effect, the Court, acting 
on principles of equity, will not, at the father’s instance, disturb 
that arrangement. I refer to the considerations influencing the 
Court in such cases as Lyons v. Blenkin (1821), Jac. 245; Roberts 
v. Hall (1882), 1 O.R. 388, approved of in Chisholm v. Chisholm 
(1908), 40 S.C.R. 115. 

Therefore, in the peculiar circumstances of this case, following 
Ex p. Templer (1847), 2 Saund. & C. 169, I refuse to change the 
• custody. 

I do not award costs to either side. 

I can only express the earnest desire that the parties may 
take thought and act reasonably and considerately on both sides, 
so as to preserve harmony in the family and avoid a devastating 
litigation in the Courts, which may go far to impoverish the 
moneyed litigant, and to embarrass the one who is poorer. 

[An appeal from the above decision was heard by a Divisional Court 
on the 27th May, 1912. Judgment was reserved.] 



XXVI.] 



ONTARIO LAW REPORTS. 



117 



[Falconbridge, C.J.K.B.] 

Bethune v. The King. 

Succession Duty — Bequest of Share of Income of Fund — “ Legacy by Way of 
Annuity ” — Succession Duty Act, 7 Edw. VII. ch. 10, sec. 11(1) — Vol- 
untary Payment to Crown by Executors of Will — Death of Legatee — 
Right to Recover Part of Sum Paid — Mistake of Fact or Law — Im- 
providence. 



A bequest in a will of the interest or income of a fund is not a “legacy 
given by way of annuity,” within the meaning of sec. 11(1) of the Suc- 
cession Duty Act, 7 Edw. VII. ch. 10, but simply a gift of interest or 
income. 

Where the whole of the succession duty attributable to the share of the 
income from a residuary trust fund bequeathed to a daughter of the 
testator was paid by his executors to the Treasurer of Ontario, and the 
legatee died about a year and a half after the death of the testator, 
when only one of the four “equal consecutive annual instalments” men- 
tioned in sec. 11(1) would have been paid if the method of payment by 
instalments had been adopted: — 

Held, that the payment was a voluntary one, not made under a mistake of 
fact; and, if made under a mistake of law, no part of the money could 
be recovered by the executors from the Crown. 

Semble, that the payment was not improvident. 

Petition of right presented by the suppliants as executors 
and trustees of the will of John Sweetland, deceased. 

January 27. The petition was tried before Falconbridge, 
C.J.K.B., without a jury, at Ottawa. 

F. H. Chrysler, K.C., for the suppliants. 

H. D. Gamble, K.C., for the Crown. 

March 30. Falconbridge, C.J.: — The petition, after setting 
out the will and probate thereof, states that the Solicitor to the 
Treasury for Ontario furnished the suppliants a statement shewing 
that the total succession duty payable in respect of the legacies 
and bequests of the said will amounted to the sum of $8,379.82; 
that of this amount the sum of $2,139.80 was attributable to duty 
payable in respect of the annuity bequeathed by the will to Caro- 



1912 

March 30. 



118 



ONTARIO LAW REPORTS. 



Falconbridge, 

C.J. 

1912 

Bethune 

v. 

The King 



[VOL. 



line Florence Anderson;* that, in and by sec. 11 of the Succession 
Duty Act then in force, the duty payable upon any legacy given 
by way of annuity was to be paid in four equal consecutive annual 
instalments; and that, in the event of the annuitant dying before 
the expiration of the first four years, payment only of the instal- 
ments which fell due before the death of the annuitant should be 
required. 

The suppliants, deeming it advisable to discharge the whole 
of the succession duty at once, and obtain a release thereof, paid 
to the Treasurer for Ontario a sum of money which included the 
duty, amounting in the aggregate to $2,139.80, attributable to 
the annuity bequeathed to the said Caroline Florence Anderson. 

The said Caroline Florence Anderson departed this life on or 
about the 9th day of November, 1908; and, therefore, the suppli- 
ants claim that, at the time of her decease, the only amount which 
they were legally liable for was the instalment of $534.95 which 
became payable on the 5th May, 1908. And the suppliants 
claim that they paid to the said Treasurer $1,604.85 in excess of 
the legal and proper amount payable. 

The Attorney-General for Ontario, on behalf of His Majesty, 
objecting that the petition of right discloses no facts giving any ' 
cause of action to the petitioners against the Crown, says that the 
legacy or bequest to the said Caroline Frances Anderson was not 
an annuity within the meaning of the Succession Duty Act then 
in force; and, therefore, is not affected by that provision of sec. 11, 
sub-sec. 1, of said Act, which requires payment only of the in- 
stalments falling due before the death of the annuitant; and he 

*The testator died on the 5th May, 1907. His will was dated the 
10th March, 1906. After certain specific bequests, he created a residuary 
trust fund, and directed that his executors and trustees .should stand pos- 
sessed thereof upon trust during the respective lives of his daughters, 
Selina Florence Geddes, Elizabeth Jane Thompson, and Caroline Florence 
Anderson, “to pay the net income derivable from the investment of the 
said residuary trust fund . . . unto the said Selina Florence Geddes, 

Elizabeth Jane Thompson, and Caroline Florence Anderson,” in certain 
proportions specified; “and, upon the death of any of my said daughters, 
in trust to pay the share of such deceased daughter in the said net-income 
unto the surviving daughters in equal shares, and, upon the death of 
any one of such two surviving daughters, in trust to pay the whole of 
the said income unto the sole surviving daughter during her lifetime, and, 
upon the death of such sole surviving daughter, in trust to divide the 
said residuary trust fund between my granddaughter Isabella Shaw, 

. . . the children of the said Caroline Florence Anderson, and the 

children of my stepson . . . , share and share alike, so that each of such 

persons will receive an equal amount.” 



XXVI.] 



ONTARIO LAW REPORTS. 



119 



further pleads that, if the legacy in question does come within the 
provision of sec. 11, then the amount paid for succession duty 
was paid under a mutual mistake of law, and is not recoverable 
back. 

He further pleads, in the alternative, that, if the petitioners 
are entitled to the repayment of the said succession duty as claimed 
in the petition, then a further succession took place on the death 
of the said Caroline Florence Anderson as to that portion of the 
estate from which her claim was derived; and the succession duty 
thereon should be ascertained and paid. 

Further, in the alternative, he pleads that the commutation 
of the succession duty to be paid was compromised upon the con- 
sideration of the whole estate, and the different interests therein; 
and, if the petitioners are entitled to repayment as asked, then the 
whole matter should be re-opened, and a new computation made. 

The case rests entirely on the correspondence and on the un- 
contradicted evidence of Mr. Bethune. 

The money was voluntarily paid in supposed pursuance of 
secs. 11 (1) and 12 (5) of the Succession Duty Act then in force 
(7 Edw. VII. ch. 10). 

Section 11 (1) is, in part, as follows: “ Provided that the 
duty chargeable upon any legacy given by way of annuity whether 
for life or otherwise shall be paid in four equal consecutive annual 
instalments, the first of which shall be paid before the falling due 
of the first year’s annuity and each of the three others within the 
same period in each of the next succeeding three years. In case 
the annuitant dies before the expiration of the said four years 
payment only of the instalments which fall due before his death 
shall be required.” 

Section 12 (5) is as follows: “ Notwithstanding that the duty 
may not be payable under this section until the time when the 
right of possession or actual enjoyment accrues an executor or 
person who has the custody or control of the property, may, with 
the consent of the Treasurer, commute the duty which would 
or might, but for the commutation, become payable in respect 
of such interest in expectancy, for a certain sum to be presently 
payable, and for determining that sum the Treasurer shall cause 
a present value to be set upon such duty, regard being had to the 
contingencies affecting the liability to and the rate and amount 



Falconbridge, 

O.J. 

1912 

Bethune 

v. 

The King 



120 



ONTARIO LAW REPORTS. 



[VOL. 



Falconbridge, 

C.J. 



1912 

Bethune 

V. 

The King 



of such duty and interest; and on the receipt of such sum the 
Treasurer shall give a certificate of discharge from such duty.” 
Both the Solicitor to the Treasury and the suppliants seem to 
have assumed that the benefit conferred by the will upon Mrs. 
Anderson was a legacy given by way of annuity, within the mean- 
ing of sec. 11 (1). The authorities are quite clear that it was not 
an annuity. They are set out in the extended notes of argument, 
and the effect both of English and American cases is, that the 
income or interest of a certain fund is not an annuity, but simply 
a gift of interest or income. Among the numerous authorities 
cited, I refer particularly to Foley v. Fletcher (1858), 3 H. & N. 769; 
Winter v. Mouseley (1819), 2 B. & Aid. 802, at p. 806, where Best, 
J., says: “I have . . . always understood the meaning of 

an annuity to be where the principal is gone forever, and it is 
satisfied by periodical payments.”* See, in the United States, 
Booth v. Ammerman (1856), 4 Bradford ((N.Y. Surr.) 129, at p. 
133. 



If the money, then, was paid under mistake of law, which 
Mr. Chrysler seems to disavow, it could not be recovered back. 
James, L.J., says, in Rogers v. Ingham (1876), 3 Ch.D. 351, at 
p. 355: “I have no doubt that there are some cases which have 
been relied on, in which this Court has not adhered strictly to 
the rule that a mistake in law is not always incapable of being 
remedied in this Court; but relief has never been given in the case 
of a simple money demand by one person against another, there 
being between those two persons no fiduciary relation whatever, 
and no equity to supervene by reason of the conduct of either of 
the parties . . .” That is not this case, and it is the Crown 

from whom repayment is sought; and the position of the Crown 
is, as one might expect, certainly not inferior to that of a 
subject. This is very clearly laid down in William Whiteley 
Limited v. The King (*1909), 101 L.T.R. 741. 

Then it was certainly not paid under a mistake of fact. The 
only mistake (if any) was something which related to a future 

*The following English cases were cited, in addition to those mentioned 
by the learned Chief Justice: Gibson v. Bott (1802), 7 Ves. 89, 96; Bridie 
v. Field (1854), 19 Beav. 497; Hedges v. Harpur (1858), 3 De G. & 
J. 129; Baker v. Baker (1858), 6 H.L.C. 616; In re Crane, [1908] 1 Ch. 
379. 



XXVI.] 



ONTARIO LAW REPORTS. 



121 



event, viz., the absolutely unforeseen occurrence of this lady de- Fal T.j* ldge ’ 
parting this life when she did. 1912 

I do not see, therefore, how the suppliants can recover. It is 

not a case of hardship; the estate as a whole does not suffer. If Bethune 
the money had not been paid in this way, there would have been The King 
some other succession; and, some of the reversionary legatees 
being strangers, it is probable that, in the result, a larger amount 
of duty would have to be paid. 

In this view, and considering that it was done to facilitate a 
winding-up of the estate, I think that the payment by the ex- 
ecutors was not improvident; and probably in the passing of their 
accounts this circumstance will be taken into consideration. • 

I am of the opinion, therefore, that no case has been proved 
giving rise to any cause of action against the Crown; and that the 
petition should be dismissed. 

It is not a case for costs as between the parties. If I have the 
power so to order, I direct that the suppliants be paid their costs, 
as between solicitor and client, out of the estate. 



[IN THE COURT OF APPEAL.] 

Stone v. Canadian Pacific R.W. Co. C. A. 

Railway — Injury to Brakesman — Foreign Box Freight Car — Appliances for 1912 
Coupling — Dominion Railway Act, secs. 264, 317 — Interchange of “ 

Tr affic — N eg ligenc e — E vidence — J ury . Apr 1 R4 

The plaintiff, who had had experience as a railway brakesman, was acting 
as brakesman on a freight train of the defendants, when it became his 
duty to effect a coupling between a freight box car, part of the train 
referred to, which car (called the Wabash car) did not belong to the de- 
fendants, but had been received by them from a foreign railway company 
in the ordinary course of interchange of traffic, pursuant to sec. 317 of 
the Railway Act, R.S.C. 1906, ch. 37, and another car. The Wabash car 
was provided with automatic couplers; but, while it had a ladder at the 
side, near the end, it had no ladder on the end, as required by sec. 264 
(5) of the Act. When the engine was moving the Wabash car towards 
the other car, the plaintiff, observing that the knuckle and coupler were 
closed, went down the ladder on the side of' the Wabash car, near the 
end which was approaching the other car, with the intention of getting 
hold of the coupler-rod to open the knuckle so as to receive the coupler 
of the other car. He went to the bottom step, and, with his left foot 
resting on it, and holding on to the lowest rung of the ladder with his 
left hand, endeavoured to reach round the end of the car to the coupler- 
rod. While he was in this position, the moving car passed over a cross- 
ing, and the jar caused his foot to slip from the bottom step, and he fell 
with his arm under the wheels. In an action for damages for his 
injuries : — 



9 — XXVI. O.L.E. 



122 



ONTARIO LAW REPORTS. 



C, A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 



[VOL. 



Held, that what befell the plaintiff was not due to the absence of a ladder 
at the end of the car, nor to the insufficient length oif the coupler-rod; 
but to the plaintiff not having taken the proper course, viz., to signal the 
engine-driver to stop, and then get down and make the coupling from 
the ground, which he could have done; that there was no negligence on 
the part of the defendants; and no evidence to sustain such of the find- 
ings of the jury as were in favour of the plaintiff. 

Per Moss, C.J.O. : — The obligation of sub-sec. (5) of sec. 264 of the Rail- 
way Act is confined to cars “of the company;” and the absence of end 
ladders on thp Wabash car was not a contravention of the obligation. 

The following statement of the facts is taken from the judg- 
ment of Moss, C.J.O. : — 

This is an appeal by the defendants from a judgment entered 
by the Chancellor of Ontario, upon the answers of the jury at the 
trial, awarding the plaintiff $6,000 damages for injuries received 
while in the defendants’ employment as a brakesman. The plain- 
tiff was endeavouring to effect a coupling between two box freight 
cars, at or near Bolton Junction, a station on one of the defendants’ 
lines of railway, and, while doing so, was either shaken off or fell 
from a ladder affixed to the side and close to the end of the car 
upon which he was riding, and one of the wheels passed over his 
right arm, necessitating amputation. The box freight car in 
question was not the property of the defendants, but had been 
received and was being hauled over their lines under the inter- 
change of traffic provisions of the Railway Act. It had been re- 
ceived by the defendants at Detroit from the Wabash Railroad 
Company on the 14th March, 1911, loaded with merchandise 
for various points on the defendants’ lines of railway, and on the 
18th March it was in course of return to Detroit, via Toronto 
Junction, as part of one of the defendants’ regular way-freight 
trains, when the accident happened. 

The plaintiff attributes the accident to three causes: (a) the 
la der being defective because the lowest step, or the step which 
was placed below the bottom of the car, was not joined to the rest 
of the ladder, but was separate and attached to the bottom 
timbers of the car, and was loose and insecure; (b) there was no 
ladder on the end of the car close to where the side ladder was; 
and (c) the coupling-rod used for controlling the action of auto- 
matic couplers, when about to effect a coupling of cars, did not 
extend outward from the couplers to the side of the car, or within 
a short distance from it, but was so short as to necessitate the going 
in between the cars, or at all events to render it necessary to reach 
\€iy far beyond the side of the car in order to get hold of it. 



XXVI. 



ONTARIO LAW REPORTS. 



123 



The defendants denied all liability, and witnesses were ex- 
amined on both sides. At the conclusion of the plaintiff’s case, 
counsel for the defendants moved for judgment on the ground 
that no case of negligence had been shewn, but the learned Chan- 
cellor declined to withdraw the case from the jury. The motion 
was renewed at the conclusion of the whole case and again denied. 

The learned Chancellor submitted to the jury a number of 
questions which with the answers returned are subjoined, viz . : — 

1. Was the car in question owned by the C.P.R. or by another 
company? A. Owned by another company. 

2. Was the car and its fittings reasonably safe for the employees 
of the C.P.R. , in the usual operations of the road? A. We think 
not. 

3. Was the plaintiff, having regard to all the circumstances, in 
his method of arranging the gear for coupling the cars, acting 
according to good and proper practice? A. Not having received 
circular No. 4, we think he acted to the best of his knowledge. 

4. If not, wherein did he err? 

5. Was the plaintiff injured in consequence of any defect in the 
make-up of the car? A. Yes, in our opinion we think he was. 

6. If he was so injured, state everything which you find to be 
wrong. A. The car in question lacked the ladder on end of car 
and long lever equipment used by C.P.R., in which company he 
was employed. 

7. Could the plaintiff, by the exercise of reasonable care, have 
provided for the coupling of the cars with safety to himself? 
A. In our opinion, not under the circumstances. 

8. Do you find negligence as to the matters in dispute? 

(a) In the C.P.R.? 

(b) In the plaintiff? 

(c) Or, in both of them? 

9. If so, state briefly what was the negligence in each case. 

10. If the plaintiff is entitled to damages, state how much. The 

jury have agreed on $6,000 for damages for plaintiff. 

Upon the answers judgment was entered for the plaintiff for 

$ 6 , 000 . 

The defendants now appeal, contending that the plaintiff is 
not entitled to recover damages against the defendants; that, if 
entitled to any judgment, the damages should be limited to the 



C. A 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 



124 



ONTARIO LAW REPORTS. 



[VOL. 



0. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 



amount recoverable under the Workmen’s Compensation for In- 
juries Act; and that, in any event, the damages awarded are 
excessive. 

January 18 and 19. The appeal was heard by Moss, C.J.O., 
Garrow, Maclaren, Meredith, and Magee, JJ.A. 

7. F. Hellmuth, K.C., and Angus MacMurchy, K.C., for the 
defendants. The learned trial Judge should have given effect 
to the motion for nonsuit at the close of the plaintiff’s case, or at 
least upon the whole case he should have told the jury that no 
liability had been made out. There was no breach of any statute 
by the defendants. Unless the provisions of sec. 264 of the 
Railway Act, R.S.C. 1906, ch. 37, apply, there appears to be no 
rule against the transport of foreign box freight cars. The car in 
question was not in contravention of that section. It was re- 
ceived in the ordinary course of the obligation to interchange 
traffic, imposed by sec. 317 of the Railway Act, and was properly 
inspected. The evidence shewed that the accident was caused, 
not by the negligence of the defendants, but by that of the plain- 
tiff, and that he was the author of his own injury. His position 
on the ladder was not a proper one, and was an unauthorised and a 
dangerous one. He should have signalled the engine-driver to 
stop, and then got down and made the coupling from the ground. 
At any rate, the jury by their answers’ have not directly found 
the defendants guilty of negligence, though they have found that 
the Wabash car was defective. There was no evidence on which a 
jury could reasonably find that the alleged defects pointed to in 
the answers to questions 5 and 6 were the proximate cause of the 
accident. There was no evidence to justify the answer to ques- 
tion 7. There was neither statutory nor common law liability. 
In any event the damages are excessive. 

A. E. H. Creswicke , K.C., and Christopher C. Robinson , for the 
plaintiff. The judgment below should be affirmed. The findings 
of the jury which bear upon the questions of negligence and con- 
tributory negligence are amply supported by the evidence, and 
should not be disturbed. The evidence and findings of the jury 
shew clearly that the defendants were guilty of a breach of their 
statutory duty under the Railway Act, and that such breach was 
the cause of the accident. See sec. 264 (c), and sub-sec. 5; Durant 
v. Canadian Pacific R.W. Co. (1909), 13 O.W.R. 316; Scott v. 



XXVI. ] 



ONTARIO LAW REPORTS. 



125 



Canadian Pacific R.W. Co. (1909), 19 Man. L.R. 165. In every- 
thing but the ladders, the Act deals with the train, the ladders 
being dealt with in reference to “cars.” Therefore, the statute 
applies to the coupler, whether the cars are foreign or not. In 
reference to sec. 256 of the Railway Act, see Atcheson v. Grand 
Trunk R. W. Co. (1901), 1 O.L.R. 168, and MacMurchy and 
Denison’s Railway Law of Canada, 2nd ed., p. 410. As to secs. 
284 and 317, no company is bound to accept cars unless properly 
equipped: Richardson v. Great Eastern R.W. Co. (1876), 1 C.P.D. 
342. On the question of contributory negligence, we submit 
that on a plea of “not guilty by statute” that question is not 
open. Doan v. Michigan Central R.W. Co. (1890), 17 A.R. 481, 
is not conclusive. The jury have found against contributory 
negligence: Canadian Northern R.W. Co. v. Anderson (1911), 
45 S.C.R. 355. 

Hellmuth, in reply. We are not obliged to plead contributory 
negligence. 



C. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 



April 4. Moss, C.J.O. (after setting out the facts as above) : — 
Upon all the facts disclosed in evidence, and having regard to the 
circumstances under which the plaintiff met with the injury, I 
think that, if I had tried the case without a jury, I should have 
had no hesitation in holding that the plaintiff had not succeeded 
in fastening liability upon the defendants. But, the case having 
been submitted to the jury, and their answers to the questions 
being now before us, there arise for consideration the questions: 
(a) whether there was evidence proper to submit to the jury upon 
the questions of negligence on the part of the defendants; and, if 
so, (b) whether, upon the answers, judgment should not have been 
entered for the defendants. 

The plaintiff, a young man twenty-two or twenty-three years 
of age, who had been for over five years in the employment of the 
Canadian Express Company, but in what capacity does not appear, 
though it may be inferred that it was work in connection with 
railways, and was subsequently employed by the Grand Trunk 
Railway Company as a brakesman for six months, entered the 
defendants’ employment as a spare brakesman on the 20th August, 
1910, and continued in that capacity, though not engaged all the 
time in actual work, until the date of the accident, on the 18th 



126 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 

Moss, C.J.O. 



March, 1911. On that day he was engaged as brakesman on a 
freight train with the box freight car in question as one of the cars. 
At Bolton Junction it was necessary to detach a car which was to 
be left there, and it was cut out by means of a running shunt. 
After performing that and some other operations, the next step 
was to unite the remainder of the cars, which were to go on to 
Toronto Junction. The car in question — called the Wabash car — 
was to couple with a car some distance from it on the line. The 
plaintiff, as his duty required, went upon the roof to signal the 
engineer to back down to the other car. When the engine was 
moving the Wabash car down towards the other car, the plaintiff, 
according to his testimony, observed that the coupler on it was 
closed — that is, that the knuckle was not in a position to effect 
a coupling with the Wabash car unless the knuckle or its coupler, 
which was also closed, was opened. 



In order to open this knuckle, the plaintiff went down the ladder 
on the side of the Wabash car, near the end which was approach- 
ing the other car, with the intention of getting hold of the lever 
or coupler-rod by which the knuckle was opened or closed, and 
by lifting it thereby open the knuckle so as to receive the coupler 
of the other car. He went to the bottom step, and, with his left 
foot resting on it, and holding on to the lowest rung of the ladder 
with his left hand, and with his right foot hanging down and 
swinging in the air, he endeavoured to reach around the end of the 
car to the lever or coupler-rod. This lever was connected with 
the top of the coupler, with the rod projecting towards the side 
of the car on which the plaintiff was. While he was in this position, 
the car, moving at the rate of about seven miles an hour, passed 
over a crossing of two tracks, and the jar caused his foot to slip 
from the bottom step, and he fell with his arm under the wheels. In 
his evidence he said that the lever-rod projected only some fifteen 
or sixteen inches from the coupler, which was about four feet from 
the side of the car, so that the end was about thirty-two or thirty- 
three inches from the side of the car where he was. He further 
said that the bottom step was about eleven inches in width, and 
was loosely and insecurely fastened to the bottom timber of the 
car, besides not being under the ladder but to one side of it, and 
that the side which was the furthest from the end of the car. In 
all these respects the testimony adduced by the defendants amply 



XXVI.] 



ONTARIO LAW REPORTS. 



127 



and satisfactorily displaced the plaintiff’s contentions. But, as 
the case stood at the end of the plaintiff’s case, the learned Chan- 
cellor could not have withdrawn it from the jury if the defendants’ 
negligence rested upon proof of these facts. It was admitted that 
the Wabash car had not ladders on the ends, as required by sec. 
264 (5) of the Railway Act. The plaintiff, in examination in 
chief, stated that, had there been a ladder at the end of the car, 
he would have gone down it, and endeavoured to make the coup- 
ling. But on cross-examination he admitted that it was not good 
railway practice to go down between the ends of two cars to make 
a coupling when the car was in motion — but, he said, “you see it 
done every day.” It is manifest that such a practice is not only 
dangerous but is directly opposed to the policy of the law as de- 
clared by sec. 264 (c) of the Act. He also suggested that, if the 
ladder had been at the end, he might have saved himself from fall- 
ing, by catching it; bu,t it is difficult to suppose that he could 
have seriously believed that that was one of the purposes for which 
a ladder is required on each end of a car. It was not, however, 
proved or admitted during the plaintiff’s case that the car was not 
the property of the defendants. And, assuming it to have been 
the defendants’ property, there were the questions whether it 
was fitted with couplers and ladders as required by sec. 264, and 
whether the failure to provide them was the cause of the accident, 
or whether it was due to the plaintiff’s own want of care or failure 
to observe the usual and proper modes of making the coupling. 
The plaintiff admitted that the proper course would have been 
to signal the engine-driver to stop, and then get down and make the 
coupling from the ground, which he could have done. He excused 
himself by saying that he was on the fireman’s side of the car, 
and that the engine-driver was not looking, and so he (the plain- 
tiff) could not give any signal. 

Upon the whole, although scanty, there was enough at the 
close of the plaintiff’s case to justify the refusal to enter judgment 
for the defendants. But at the close of the whole case, when it had 
been proved, and indeed admitted, that the car was not the de- 
fendants’ property, but was owned by the Wabash or some other 
company, other questions arose as to the liability of the defend- 
ants for the failure of this car to comply with all the requirements 
of sec. 264, applicable to couplers and ladders on box freighters. 



0. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 

Moss, C.J.O. 



128 



ONTARIO LAW REPORTS. 



[VOL. 



0. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 

Moss, C.J.O. 



The car had been received in the ordinary course of the obligation 
to interchange traffic, imposed by sec. 317 of the Railway Act. 
It had been inspected in due course and passed in accordance 
with the ordinary practice, by inspectors whose competency was 
not questioned. Many hundreds of box freight cars without 
ladders on each end are received and passed daily, entering Canada 
from the United States. It is shewn that there is no rule, statutory 
or otherwise, requiring that there shall be ladders on the ends as 
well as on the sides of box freight cars used on railways operated 
in the United States. The car was provided with automatic 
couplers, but the complaint is as to the length of the lever, or 
coupling-rod. There is no express provision in the Railway Act 
prescribing the length of the lever, but the testimony for the de- 
fendants shewed that the end of the lever on the car extended to 
within fifteen or sixteen inches of the side, instead of thirty-two 
of thirty-three inches, as .the plaintiff stated. The modern 
Canadian lever is made to extend out to the side, or to within at 
least eight inches; but cars from the United States, with the end 
of the lever fifteen or sixteen inches from the side, are admitted 
and passed in the usual and ordinary course of inspection. Unless 
the provisions of sec. 264 apply, there appears to be no statutory 
or other rule against the transport of foreign box freight cars, 
although they do not comply in every respect with the Railway 
Act. 



Section 264 (1) enacts that “every company shall provide 
and cause to be used on all trains modern efficient apparatus, 
appliances and means, ...(c) to securely couple and 
connect the cars composing the train, and to attach the engine 
to such train, with couplers which couple automatically by im- 
pact, and which can be uncoupled without the necessity of men 
going in between the ends of the cars.” Assuming the expression 
“and cause to be used” to comprehend foreign cars in transport 
over the defendants 7 lines, the car in question was not open to 
objection for any defect in the above-mentioned respects. 

Sub-section (5) enacts that “all box freight cars of the company 
shall, for the security of railway employees, be equipped with, 
— (a) outside ladders, on two of the diagonally opposite ends and 
sides of each car, projecting below the frame of the car, with one 
step or rung of each ladder below the frame, the ladders being 



XXVI.] 



ONTARIO LAW REPORTS. 



129 



placed close to the ends and sides to which they are attached.” 
The car in question had not ladders on the ends, but it was not 
a car “of the company.” There is a distinction drawn between 
the couplers to be used on all trains, and the equipment of box 
freight cars with ladders. The obligation with regard to the latter 
is confined to cars of the company. The car was, therefore, not 
in contravention of the sub-section. Even if the contrary were 
the case, it is clear that their absence in no way contributed to 
the accident which befell the plaintiff. I think that, upon the 
whole case, the jury should have been told that no case appeared 
upon which they could reasonably find that the defendants were 
negligent, and that no case of liability had been made out; and 
that the action should have been dismissed. 



C. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 

Moss, C.J.O. 



Assuming, however, that it was proper to submit the case 
to the jury, is the plaintiff entitled to judgment upon the answers 
returned to the questions? It is to be observed, in the first place, 
that the j ury failed to return answers to the very pointed and ma- 
terial question on the head of negligence contained in No. 8. 
But they answer the very general question No. 2, “Was the car 
and its fittings reasonably safe for the employees of the C.P.R. 
in the usual operations of the road?” which is not directly pointed 
at the alleged defects leading to the injury, and a negative answer 
to which is not a finding of negligence on the part of the de- 
fendants. 



The answers to questions 4 and 5 bear more directly on the 
question. They attribute the plaintiff’s injury to the fact that 
the car in question lacked the ladder on the end of the car and the 
long lever attachment used by the defendants in their cars. But 
there is no evidence upon which a jury could reasonably find that 
these alleged defects were the proximate cause of the accident. 
The plaintiff was endeavouring by using the side ladder not as a 
means of descending the ladder to the ground and there effecting 
the coupling, as he admits was the proper course, but for the pur- 
pose of enabling him, by using the lowest step as a foothold and 
crouching with his body in a strained and awkward position, to 
effect the coupling, without stopping the car or getting down to 
the ground. The position was admittedly an improper, and cer- 
tainly a very dangerous, one, not authorised to be taken. The 
method adopted by the plaintiff to endeavour to effect the coupling 



130 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 

Moss. C.J.O. 



[VOL. 

was the very one most calculated to expose him to danger and 
risk of injury. And there is no evidence to justify the answer 
of the jury to the 7th question, an answer which, in its terms, is 
inconclusive and unsatisfactory. There were no “ circum- 
stances ” to prevent the plaintiff from adopting the perfectly safe 
course which he admits he might have done. 

Having regard to the evidence in the case, I do not think the 
answers sufficient to support the judgment entered for the plaintiff ; 
and I think that, notwithstanding them, judgment should have been 
entered dismissing the action. 

The appeal should be allowed, and the action dismissed, with 
costs if exacted. 

Garrow and Maclaren, JJ.A., concurred. 

Meredith, J.A.: — A good deal that has been said and done 
in this case seems to me to have quite missed the mark which 
should have been arrived at; for instance, all of that branch of it 
which deals with the requirements of the statute-law regarding 
ladders at the ends of “box freight cars.” It can make no differ- 
ence whether there was any such requirement in respect of the 
“Wabash” car, from which the plaintiff fell, or, if so, whether that 
obligation was imposed upon the company that owned the car, 
or upon the company who were using it in the carriage of their 
freight, or upon the defendant company, who had received 
and were forwarding it as interchanged freight only, if, 
as I think, it is incontrovertible that the ladder was not required 
to be provided for the work in which the plaintiff was engaged 
when he fell and was hurt; but, on the contrary, that, if he had 
made use of any such ladder for such a purpose, he would have 
misused it, contrary to the provisions of the enactment in question, 
against the wishes and interests of his masters, against his own 
interests, and against the first instincts of all animals — self-preserva- 
tion. If he had fallen from such a ladder as he did from the one 
in question, his life, not only one hand, would have paid the pen- 
alty. 

It is quite obvious to any one who has not had, as the plaintiff 
had, six years’ experience in railway matters as a brakesman and 
otherwise, that it is dangerous to go between cars of any train, 
and extremely so if they are in motion; and it is equally obvious 



XXVI.] 



ONTARIO LAW REPORTS. 



131 



that that risk should not be taken in any case in which it can rea- 
sonably be avoided; quite obvious that it is against the interests 
of him who does it, of his relatives and friends, and of his employ- 
ers, as well as against the public interests, that risk of life or limb 
should be undertaken when there is no occasion for it. 

As to his experience, he tells of it in these words: — 

“Q. You have had no experience in railway matters before 
you went into the employ of the C.P.R.? A. Yes, sir. 

“Q. To what extent? What was your experience? A. I had 
been with the Canadian Express Company for about five or six 
years, and I was with the Grand Trunk as brakesman. 

“Q. Passenger brakesman or freight? A. Passenger and 
freight both. 

“Q. Then your experience up to the time you quit their 
employ would be about five or six years, would it? A. Yes, 
about six years.” 

In the same section of the Railway Act in which the require- 
ment as to the ladders is contained, it is expressly and plainly 
required, in the interests and for the safety of just such men as the 
plaintiff, that automatic couplers, “which can be uncoupled 
without the necessity of men going in between the ends of the 
cars,” shall be provided, and used, upon cars such as that in ques- 
tion. So that, if such couplers are provided, what possible excuse 
can there be for going between the cars to uncouple them, not to 
speak of going between them and doing the work on a perpendicu- 
lar box car ladder, without any sort of reason for not doing that 
work from without the cars? 

It seems to have been thought necessary, by a learned Judge, 
to say that you cannot have damages for injury to a finger in the 
closing of a passenger carriage door, merely because the head- 
light of the engine, which was drawing the train, was not burning 
when it should have been; and so it seems to me to be necessary 
to repeat somewhat frequently the observation that one cannot 
have damages for any negligence which is not the proximate cause 
of the injury. 

So that really this case depends entirely upon the two ques- 
tions: (1) whether the defendants were guilty of -any negligence in 
respect of the kind of brake which the plaintiff was attempting to 
uncouple only; and, if so, (2) whether that negligence was, or 



C. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 

Meredith, J.A. 



132 

C. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 

Meredith, J.A. 



ONTARIO LAW REPORTS. [vol. 

whether the plaintiff’s want of care in whole or in part was, the 
cause of his injury. 

The jury have not found any negligence in the defendants; 
it would be very hard to see how they could. The question was 
pointedly put to them. The substance of their findings, in so far 
as they affect this case, is, that the “Wabash” car was “defective” 
in not having “the ladder on the end of the car and long lever 
equipment,” such as the defendants have upon their own cars; 
and that, in consequence of such defects, the plaintiff was injured. 

The findings are not very consistent, for, if the ladder which 
was not provided had been provided, and if the plaintiff had used 
it, he would have had no need of a long lever uncoupling rod. 
His testimony is, that, if there had been a ladder at the end of the 
car, he would have used it in uncoupling. A longer rod might 
have made the task of uncoupling from the side ladder somewhat 
easier; but possibly less so from an end ladder; the lengthened 
rod is to enable doing the work without going between the cars. 

But there is no evidence that the uncoupling rod did not fully 
comply with the requirements of the statute, and no finding that 
it did not; how then can the judgment be sustained? And, as 
I have before mentioned, there is no finding of negligence on the 
part of the defendants; and, if there had been, there is no evidence 
whatever to support such a finding; the plaintiff’s case seems to 
me to be hopeless in this respect; indeed, it may be that the re- 
quirements of the enactment, in this respect, are all that the law 
can require from any company subject to its provisions, whichever 
company may be the one to which it applies, if it does not apply 
to more than one of the companies concerned in the making and 
the movement of the car in question. 

In addition to all this, it seems to me to be impossible for any' 
reasonable man to say, conscientiously, that the plaintiff’s injury 
was not caused altogether by his own negligence; and considerably 
less than that would deprive him of any right to recover. 

The statute-law, passed for the especial benefit of persons 
engaged in car coupling and uncoupling, as a brakesman especially 
is, shews the impropriety of uncoupling in any manner making it 
necessary to go between the cars for that purpose. If the plaintiff 
were a novice complaining of being put at dangerous work without 
proper instructions, the case might be different; but he was a 



XXVI.] 



ONTARIO LAW REPORTS. 



133 



man of six years’ experience “in railway matters;” and is without 
any sort of excuse for adopting the extraordinary method which 
he was employing when injured. I cannot but think it likely to 
bring legal methods into conflict with the commonest of common 
sense if it can be lawfully determined that the plaintiff was acting 
properly in endeavouring to uncouple cars in motion, from a ladder 
on the side of the car, too far, according to his testimony, from the 
end of it, and,, according to the same testimony, with a foot-hold 
too shallow and not wide enough to get both his feet into, and 
shaky at that, with a coupler rod too short to be operated without 
danger; and while supported by one foot only upon the loose 
step, and one hand only upon the rung of the ladder next above 
that in which his foot was, and only about twenty inches apart, 
and then making an unduly long reach around the end of the car 
with his right hand to uncouple; when there was absolutely no 
need of attempting it, and when so doing was in the teeth of the 
interest of every one, as before-mentioned, as well as of the enact- 
ment already referred to. 



C.A. 

1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 

Meredith, J.A. 



It was suggested that the plaintiff should have our sympathy, 
however unwisely he may have acted, because, it was said, he 
was taking the risk in his masters’ interests and for their benefit; 
the first part of the proposition I assent to, provided however 
that such sympathy does not warp the judgment; the latter part 
is obviously erroneous; there is no kind of evidence of over-zeal 
on the plaintiff’s part in his masters’ service; as I have intimated, 
he did that which was, and he must have known was, against the 
interests of every one because of the danger of it; he knew that 
every one’s interest required that the uncoupling should be done 
from the ground without going between the cars and when they 
were not in motion, and that there was no sort of reason why 
that course should not be taken; but familiarity with danger 
breeds contempt of it, and he is not the only man who would not 
hesitate to take the risk rather than take the additional trouble 
to stop the train and get down and uncouple and get up again; 
for, after all, the risk might be undertaken a good many times 
without a fall, and a good many falls might happen without 
getting any part of one’s body under the wheels; and he is not the 
only man who is willing to make the trip’s work as short as possible 
and to be home again as soon as possible. 



134 



ONTARIO LAW REPORTS. 



[VOL. 



0. A 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 

Meredith, J.A. 



The jury have hedged themselves in, with a shifty answer, 
from the untrue finding that the plaintiff could not, by the exercise 
of reasonable care, have uncoupled the cars in safety: “In our 
opinion, not under the circumstances;” and they quite dodged 
the question whether that which the plaintiff was trying to do 
when he fell was “according to good and proper practice,” mean- 
ing, I suppose, was it a proper method of uncoupling the cars? 
The jury should have been asked what they meant by “under 
the circumstances;” if under the circumstances of standing on 
the ladder as he was and attempting to do the work in that way — 
if they assume that that was proper — there might be some justi- 
fication for the answer; but that would be entirely begging the 
question. 



I would allow the appeal and dismiss the action. 



Magee, J.A. : — The plaintiff was brakesman on top of a freight 
car, at the rear of a train which was being pushed back to be 
coupled to another car which was stationary. Both cars had 
automatic couplers — but in order to couple it is necessary that the 
knuckle of one or other shall be open. He noticed that both were 
closed. The knuckle, according to the defendants’ witness 
Hawkes, can be opened by the operating lever of a moving car. 
To reach the operating lever the plaintiff descended the only 
ladder at that portion of the car. That was a ladder on the side 
of the car, which appears from the evidence to have been reasonably 
close to the corner or end. 

It is, I think, clear from the evidence that it was customary 
for brakesmen to operate the levers from the ladders while the 
cars were moving. It had been done only a few moments before 
by the other brakesman opening the coupler of the adjoining 
car to make a flying shunt. The conductor says it was quite 
customary, and he would not think of reporting a brakesman for 
doing it, and had never told any one not to do it. The general 
yard-master, called for the defendants, states that the lever can 
be operated from the side-ladder. 

It is sought to draw a distinction between operating the lever 
on a moving car in order to uncouple, and doing so in order to 
couple. But the plaintiff states, and he is not contradicted but 
indeed borne out by other evidence, that he had plenty of time 



XXVI.] 



ONTARIO LAW REPORTS. 



135 



to do what he was going to do and get around to the side out of the 
way before the cars would couple. Really all he proposed doing 
was operating the lever on a moving car. Nowhere do I find 
that to be forbidden. It was argued that this was contrary to 
the defendants’ circular No. 4 of the 15th February, 1911, which, 
however, the jury find the plaintiff not to have had notice of. 
That circular forbids “all acts familiarly known as taking chances,” 
and it calls attention to accidents which had occurred “solely by 
carelessness on the part of some employee, such as,” inter alia, 
“adjusting coupler . . . when 'cars are in motion.” But 

Mr. Hawkes, the defendants’, yard-master, expressly states, as 
one might expect, that opening the knuckle by the operating lever 
is not “adjusting the coupler.” That circular naturally enough 
puts “adjusting coupler” in the same category with “turning 
angle-cock or uncoupling hosebags” — all which would have to 
be done by going between the cars on the ground. But the 
circular is luminous in respect of several operations. Thus it 
refers to “accidents from holding on side of car,” but only “when 
passing platform, building, or other obstruction known to be close 
to track;” “kicking cars into sidings,” but only where other cars 
are standing; and “detaching moving cars” without first seeing 
to the brakes being in order. This last instance impliedly recog- 
nises the practice of detaching moving cars if only the brakes are 
in order. The plaintiff was injured in an operation not a whit 
more dangerous than those which are here impliedly recognised, 
and not at all one which involved the danger of going between 
cars. 



C. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W. Co. 

Magee, J.A. 



But it seems to me that the plaintiff was not warranted in 
trying to work the lever from the position which he took, that is, 
holding with one hand the very lowest rung of the ladder only 
fourteen inches above the edge of the car, with one foot on the step, 
only six and a half inches below the edge. He does not shew 
that there would have been any difficulty in reaching the lever 
while grasping a rung higher up. Mr. Hawkes considers it quite 
feasible to have done so, even from the upper rung, which I would 
doubt, though it is not contradicted. The plaintiff would seem 
to have been in fact inviting disaster by attempting to reach the 
lever while in that attitude. There was no compulsion of any 
sort upon him to do so, either from fear of injury to his employers’ 



136 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R. W Co. 

Magee, J.A. 



property or otherwise. It is simply a case of unnecessary over- 
balancing, so far as appears — and, however much one may feel 
sorry for his injury, it cannot, I think, be said to be caused by the 
defendants’ negligence or breach of statutory duty, if there was 
such duty as to this car of another company. 

Appeal allowed. 



1912 



[IN THE COURT OF APPEAL.] 



April 4. 



Rex v. Britnell. 

Criminal Law — Exposing for Sale or Selling Obscene Books — Criminal Code, 
sec. 207 — Conviction — Evidence — Knoioledge of Sale and of Character 
of Books. 



To sustain a conviction under sec. 207 of the Criminal Code, R.S.C. 1906, 
ch. 146, as amended by 8 & 9 Edw. VII. ch. 9, for selling or exposing for 
sale obscene books, it must be shewn that the books were sold or exposed 
for sale with the knowledge of the defendant, and that he knew of their 
obscene character. 

And. held, upon a case stated by a Police Magistrate, that, having regard to 
the character and extent of the defendant’s business and to his reputa- 
tion as a book-seller, there was no reasonable evidence upon which he 
might be convicted of having knowingly sold or exposed for sale obscene 
books, within the meaning of sec. 207. 



Case stated by one of the Police Magistrates for the City 
of Toronto. 

The defendant was convicted upon an information charging 
that, in the month of April, 1911, he, the defendant, contrary 
to law, exposed for sale and sold certain indecent and obscene 
books, tending to corrupt public morals, contrary to the form 
of the statute in such case made and provided. 

Section 207 of the Criminal Code, R.S.C. 1906, ch. 146, as 
amended by 8 & 9 Edw. VII. ch. 9, provides: “Everyone is guilty 
of an indictable offence and liable to two years’ imprisonment 
who knowingly, without lawful justification or excuse, — (a) 
makes, manufactures, or sells, or exposes for sale or to public 
view, or distributes or circulates, or causes to be distributed or 
circulated, or has in his possession for sale, distribution or circu- 
lation, or assists in such making, manufacture, sale, exposure, 
having in possession, distribution or circulation, any obscene 
book or other printed, .typewritten or otherwise written matter, 
or any picture, photograph, model or other object tending to 



XXVI. 



ONTARIO LAW REPORTS. 



137 



corrupt morals, or any plate for the reproduction of any such 
picture or photograph.” 

The stated case was as follows: — 

“ Pursuant to the order of the Court of Appeal dated the 
15th May, 1911, I submit the following questions for the con- 
sideration of the Court: — 

“1. Was there evidence upon which the defendant might be 
convicted of the offence of selling obscene books, within the 
intent and meaning of sec. 207 of the Criminal Code? 

“2. Was there any evidence upon which the defendant might 
be convicted of having knowingly sold or exposed for sale obscene 
books, within sec. 207 of the Criminal Code?” 

December 6, 1911. The case was heard by Moss, C.J.O., 
G arrow, Maclaren, Meredith, and Magee, JJ.A. 

George Wilkie, for the defendant, argued that it had not 
been proved that the books had been exposed for sale or that they 
were obscene, or that they were sold or exposed for sale with 
the defendant’s knowledge, or that the defendant knew of their 
obscene character. These were essentials of the case for the 
prosecution: Rex v. Beaver (1905), 9 O.L.R. 418. On the ques- 
tion of obscenity, he referred to Burbidge’s Digest of the Criminal 
Law of Canada, pp. 163 and 164, especially the note at the foot 
of the latter page. 

J. R. Cartwright, K.C., and E. Bayly, K.C., for the Crown, 
contended that the defendant had been rightly convicted. There 
was sufficient evidence to establish that the defendant had know- 
ledge that the books were on sale and were sold and that they 
were obscene. On the question of obscenity they referred to 
The Queen v. Hicklin (1868), L.R. 3 Q.B. 360; People v. Doris 
(1897), 14 App. Div. N.Y. 117; People v. Muller (1884), 96 
N.Y. 408; State v. McKee (1900), 73 Conn. 18; United 

States v. Bennett (1879), 16 Blatchf. (Circuit Court) 338; 
Rex v. Key (1908), 1 Cr. App. R. 135. 

Wilkie, in reply. 

April 4, 1912. Meredith, J.A. : — The convicted man is a 
reputable book-seller, who carries on business, in an extensive 
way, in one of the business centres of Toronto. Although neither 
his reputation, nor the character and extent of his business, is 



C. A. 
1912 

Rex 

v. 

Britnell 



10 — XXVI. O.L.R. 



138 



ONTARIO LAW REPORTS. 






[VOL. 



C. A. 
1912 

Rex 

v. 

Britnell 

Meredith, J.A. 



a reason why he should not be convicted, and punished, if guilty, 
yet they are not things without weight, and very considerable 
weight, in considering the probabilities of the truth of the charge 
against him upon the question whether there was any reason- 
able evidence of guilt adduced against him at the trial, as well 
as upon the question of fact, with which the Court cannot deal, 
whether guilty or not guilty. 

The charge against him seems to have been a double one in 
two senses, exposing for sale and selling two different obscene 
books; but no question is raised in that respect; the conviction 
seems to have been in accordance with the charge, as if of one 
offence only. 



The offence is one against morality, and one of a despicable 
character; the maximum punishment of which is two years’ 
imprisonment; and it must be “ knowingly” committed, “ with- 
out lawful justification or excuse.” 

Assuming the books to have been sc Id, or exposed for sale, 
and to have been obscene books, which is assuming a good deal 
in favour of the prosecution, two other essential things must have 
been proved against the accused before he rightly could have 
been convicted: (1) that the books were sold or exposed for 
sale with his knowledge; and (2) that he knew of their obscene 
character. This is but a reasonable provision of the law; if it 
were otherwise, the lot of a book-seller, however honest and 
anxious to avoid anything like offending morality, would be a 
hard one; and especially hard upon one who carries a stock of 
a quarter of a million volumes, as one of the witnesses thought 
the accused does. 



Neither book was manifestly or notoriously obscene or im- 
moral; and it may be that neither is in that respect better or 
worse than a great number of books which are freely sold and 
read everywhere; and there is, I should think, nothing in either 
of them to make them very attractive to any one; and the small 
profit to be derived from their sale is hardly such as would in- 
duce a large dealer to conceal them in his cellar, so that he might 
sell them with less chance of being found out, and to sell them 
with the possibility of two years’ imprisonment in the peni- 
tentiary before his eyes. 

There was no sort of evidence of any exposure of them for 



XXVI.] 



ONTARIO LAW REPORTS. 



139 



sale; and there, manifestly, should have been a finding of “not 
guilty” to that extent; but there was not; on the contrary, there 
seems to have been a conviction in respect of which the penalty 
imposed was to some extent imposed. 

Nor can I think that there was any reasonable evidence oL 
a guilty knowledge on the part of the convicted man of the sale 
which was made, and which was of one of the books only, or of 
its obscene character, if it really has any. 

It is quite plain that, in the extensive business of the convicted 
man, the books in question might have been bought and sold 
without his knowledge; he did not attend to the department in 
which such books, that is, “works of fiction,” are sold. He 
testified that he did not know that there were any such books 
in his establishment; that he had a year or more before found 
invoices of them and returned them, because, from what he had 
heard, he thought their tendency was suggestive, and so did 
not want to sell them. There is not a word of testimony to the 
contrary of this; the most that can be said is, that, if dealing 
with a man who might be thought untruthful and tricky, there 
were some circumstances of suspicion, a book having been sold 
and other books having been found in the cellar; things which 
are not unsatisfactorily explained by the witnesses for the prose- 
cution. But no one, much less a reputable man doing an exten- 
sive reputable business, is to be convicted on suspicion merely; 
when there is no more than that against him a verdict of “not 
guilty” should be entered. The statement that, from what he 
had heard, he thought their tendency suggestive, is a good way 
removed from an admission that he knew that they were obscene. 

The cases which were referred to on the argument here were 
very different from this case; in them the obscene character of 
the writings was manifest, and in some of them it was the author 
who was prosecuted and who had sold them. 

In a case of this character, where there may be different 
opinions as to the immorality of a book, which is being generally 
sold here and in other countries or another country, it would 
seem to me to be the better course for those who object to its 
sale on that ground, to give notice of such objection to such a 
book-seller as the convicted man is, and to prosecute only if the 
objection is not heeded. No such book-seller can have any 



C. A. 
1912 

Rex 

v. 

Britnell 

Meredith, J.A. 



140 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Rex 

v. 

Britnell 

Meredith, J.A. 



reasonable desire to sell such books as those in question, if they 
be obscene, for all there is in it for him, at the risk of being branded 
as a criminal and sent to penitentiary for two years, after first 
perjuring himself in the hope of escaping conviction. 

I would answer the second question in the negative and direct 
that the accused be discharged. 



Magee, J.A. : — The two questions stated by the Police Magis- 
trate under the order of the Court for its opinion refer only to 
sec. 207 of the Criminal Code, 1906, under which he had professed 
to convict. That section, as amended in 1909, declares that 
every one is guilty of an indictable offence “who knowingly, 
without lawful justification or excuse, — (a) makes, manufactures, 
or sells, or exposes for sale or to public view . . . any obscene 

book or other printed, typewritten or otherwise written matter, 
or any picture, photograph, model or other object tending to 
corrupt morals.” In the information laid against this defen- 
dant it was charged only that in the month of April, 1911, he, 
“contrary to law, exposed for sale and sold certain indecent and 
obscene books, tending to corrupt public morals, contrary to the 
form of the statute in such case made and provided.” It was 
not charged that he did it either knowingly or without justifica- 
tion or excuse. It was necessary to allege that he did it knowingly 
to bring it under that section. The information was not amended. 
He, therefore, was not charged with any criminal offence under 
that section. The words “contrary to law” and “contrary to 
the form of the statute” do not make up for the absence of that 
allegation of knowledge. 

In the formal conviction, however, the words “knowingly” and 
“without lawful justification or excuse” are inserted in setting out 
the offence, which is otherwise described as in the information, 
except that the word “morals” is substituted for “public morals;” 
and the word “obscene” for “indecent and obscene.” 

In his statement of the case for this Court, the learned Police 
Magistrate says: “The defendant elected to be tried summarily 
and pleaded not guilty. After hearing evidence, I was of the 
opinion that the charge was proved, and accordingly convicted 
the defendant, being satisfied that the books were obscene, and 
that the defendant knew that they were on sale in his establish- 



XXVI. ] 



ONTARIO LAW REPORTS. 



141 



ment.” It is not specifically stated whether or not the Police 
Magistrate was satisfied that the defendant knew of the books 
being obscene, and we are as to that left to the inference to be 
drawn from the fact that he made the conviction. In his reasons 
for his decision, given at the time, he said, “The section of the 
Code under which this prosecution is brought is 207.” 

It would, therefore, appear that the defendant was convicted 
of an offence with which he was not charged and for which he 
had not consented to be tried summarily. 

As the charge was laid “contra formam statuti,” and was 
dealt with under sec. 207, and the questions propounded refer 
only to that section, it is unnecessary to consider how far, at 
common law, a book-seller charged with selling and publishing 
an obscene libel, sold by his clerk in the course of his business, 
could shelter himself by his want of knowledge of the sale, or of 
the contents, or how far either must be brought home to him. 

Dealing, then, with the case as one under sec. 207, there 
must be shewn knowledge of the sale or exposure for sale, and 
also knowledge of the character of the book. That the latter 
must be shewn was held by this Court in Rex v. Beaver , 9 O.L.R. 
418. The former is also manifestly necessary. An auctioneer 
selling a library, or shelf or package of books, might not know 
what books it contained. Objectionable articles may be made 
or sold in a factory or shop; and, while the statute would be 
futile if the proprietor could escape because they were not made 
or sold directly by himself, but by his employees, though with 
his knowledge, it might also cause injustice if he could be punished 
because the making or selling was done for his benefit by his 
employees, though without his knowledge or consent, or even 
against his orders. 

The only books specifically referred to in the evidence are 
three recent novels, which, for brevity, I may refer to as X, Y, 
and Z. There were, indeed, other books found along with these 
three in the cellar of the defendant’s shop, but the Police Magis- 
trate does not name them, and merely says that some of them 
were of the same type, and some of them he had looked through 
sufficiently to see that they all were more or less within the scope 
of the test of obscenity. 



C. A. 
1912 

Rex 

v. 

Britnell 

Magee, J.A. 



142 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Rex 

v. 

Britnell 



Magee, J.A. 



[VOL. 



Apart from evidence as to the character of the three books, 
X, Y, and Z, the prosecution contented itself with proving that 
a copy of Y had been bought on the 6th April at the defendant’s 
shop from a clerk who brought it from the cellar; and that on 
the 8th April a Police Inspector went to the shop and there saw 
the defendant, who said that he had not a copy of X or Y; but 
the Inspector says, “On searching, we found,” in a box in the 
cellar, eleven copies of X and thirteen of Y, besides other books, 
including one or more copies of Z, and that, in the defendant’s 
presence, his clerk said that he had been selling the book Y, 
and he thought that the defendant knew it. It is not stated 
whether the defendant made any remark thereupon. Indeed, it 
is not said that he heard it. He was not asked about it when 
called in his own defence, and he did not refer to it. 

It is not shewn that any of the public or customers were ever 
admitted to the cellar. There was, therefore, no evidence of ex- 
posure of any of the books for sale, and only proof of a sale of one 
copy of one book, Y, by the clerk, and no proof of the defendant’s 
knowledge of the contents of any of the books. Z and the other 
unnamed books are not further spoken of, and may be left out 
of consideration. 

For the defence, the defendant himself and four of his 
clerks gave evidence. It appears that his stock contains 
150,000 to 250,000 books, of which 4,000 to 7,000 are kept 
in the cellar in stock. A clerk says the whole place is full of 
books, and another, that he “put the boxes of books down the 
cellar, and especially as at Christmas time there was not room 
for as much stock.” The defendant says that in the cellar he 
has in stock a theological library and cook-books and other books 
that he has not room for in the shop. One department of the 
business is that of dealing in old or antiquarian books. One of 
his clerks, Appleton, who states that he looks after the sale of 
the new books, says that X came out in 1907, “and was sold by 
other dealers here before we had it.” “We sold a great many 
copies till lately, and now we would not sell more than one a 
month or so.” The defendant, himself, testified that he did sell 
them when they first came out, but “a year or more ago” he 
found in the invoices a shipment of X and Y, and he returned 
the books, as from what he heard he thought the tendency of 



XXVI.] 



ONTARIO LAW REPORTS. 



143 



the books was suggestive, and so did not want to sell them; 
and he did not know, when the Police Inspector asked him about 
them, that he had a copy of either, and he had not read X nor Y, 
“nor such books.” A clerk also testifies that, “a year ago or so,” 
the defendant returned a shipment containing X and Y, “be- 
cause they were not, I think, the class of books he desired to sell.” 
Even if we take these statements as going far enough to shew 
that the defendant knew that the books were obscene or such as 
tended to corrupt morals, it is evident that there is here no proof 
of a sale with his concurrence after he had learned of the objec- 
tionable character of the books. 

Then it appears from the evidence of Appleton, who 
has charge of the sale of the new books, that “a year ago 
we got some twenty-five copies of each of these two books,” 
X and Y, and “ those found by the police were the re- 
mainder of that order.” The invoice containing Y seems to 
have been produced by the witness before the Police Magis- 
trate, but is not among the papers sent to this Court, and 
the exact date of it does not further appear. Appleton says: 
“The defendant probably did not know that I had ordered these 
books, as I am in charge of that branch.” Another clerk says 
that the defendant is at the office in rear, and does not know what 
new books are in stock. Another says: “The whole place is full 
of books, 250,000 I would think. Appleton and I are in charge 
of the front of the shop. The defendant is at the office in rear, 
and looks after the old books. . . . The defendant does not 

know just what books we have bought, nor all we have in stock.” 
Another clerk, Congdon, who says he is in charge of the anti- 
quarian books, says that the defendant also looks after that de- 
partment, and the defendant does not know what new books 
are in stock. The defendant, himself, says: “I am at the back 
of the shop, where the branches of the business I look after are 
situated: I do not attend to the new novels at all.” He says 
that the clerk who ordered the last copies of these two books was 
in his employ when he returned the shipment, but he only remem- 
bered telling Congdon of having sent the shipment back, and 
he, Congdon, would have nothing to do with ordering these books 
— “they would likely be ordered by Appleton.” 

Bearing in mind the extent of the defendant’s business, and 



C. A. 
1912 

Rex 

v. 

Britnell 

Magee, J.A. 



144 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Rex 

v. 

Britnell 

Magee, J.A. 



[VOL. 



the fact that the prosecution proved only one sale — and that 
by a clerk — of one book, without shewing that the defendant 
had any knowledge of its contents, can it be said that this evi- 
dence given for the defence affirmatively establishes knowledge 
by the defendant that this small order for these books had been 
given by his clerk, after he himself had sent back a shipment of 
these very books on account of their character? It may be said 
that, even taking the evidence for the defence, it is not absolutely 
clear that the defendant did not know of his clerk’s order, whether 
at the time or afterwards, or of the receipt of the books there- 
under, even though he thought that all had been sold; but it 
was for the prosecution to establish knowledge, not for him to 
shew want of knowledge; and, if the prosecution had had doubts 
upon the subject, it could have been cleared up by cross-examina- 
tion. That not having been done, there was, in my opinion, 
failure of proof of knowledge of the sale, even in the sense of 
implied or tacit authority or consent to it; and, therefore, the 
second question should be answered in the negative. 

It is unnecessary to answer the first question, as it becomes 
merely academic when the second is answered in the negative. 
No specific parts of any of the books have been referred to in 
the information, the conviction, the evidence, or in the argu- 
ment. The statement by the Police Inspector as to the contents 
of X and Y was conceded to be at best inaccurate. No particu- 
lars seem to have been asked for by the defence, or delivered. 
The result would be that it would be necessary for the Court to 
peruse the books seized to see if it could discover any objection- 
able page, phrase, or sentiment, before it could answer the ques- 
tion propounded. In a sense this would be to ask the Court 
to be accuser instead of Judge. It is a course which should not 
again be adopted. 

The defendant, on the evidence, should, in my opinion, have 
been acquitted, and the conviction should be declared invalid. 

Moss, C.J.O., Garrow and Maclaren, JJ.A., concurred. 

Conviction quashed. 



XXVI.] 



ONTARIO LAW REPORTS. 



145 



[DIVISIONAL COURT.] 

Beatty v. Bailey. 

Mortgage — Covenant for Payment Implied in Registered Charge under 
Land Titles Act — Action for Mortgage-money — Instrument not under 
Seal — Effect of Provisions of Act — Limitation of Actions — “Specialty” 
— Period of Limitation — Second '■ Mortgagee — Cessation of Charge for 
Benefit of First Mortgagee — Sale under Poioer- — Effect of, upon Right 
to Sue — Inability to Reconvey — Default of Mortgagor — Reservation 
of Rights. 

The defendant, in 1891, created a charge upon land which had been brought 
under the Land Titles Act, by an instrument, not under seal, in the 
form given in the schedule to the Land Titles Act then in force (No. 28 
in the schedule to R.S.O. 1897, ch. 138). This was a second charge or 
mortgage upon the land, and payment of ithe moneys secured was to be 
made in 1894. The instrument was registered under the Act. It did not 
in terms contain a covenant for payment of the mortgage-money: — 

Held, that, under sec. 34 of the Act (R.S.O. 1897, ch. 138), such a coven- 
ant was implied as against the person who created the charge, com- 
pleted by registration; and an action upon that covenant was not barred 
by the lapse of less than twenty years from the date of default, which 
was not earlier than 1894, being (by the effect of the Land Titles Act, 
though the instrument was not under seal) an action upon a “specialty,” 
within the meaning of the Statute of Limitations, R.S.O. 1897, ch. 72, 
sec. 1 (6) — a covenant contained in an indenture of mortgage made 
before the 1st July, 1894. 

Sections 13, 34, 40(3), 41, 101, and 107 of the Land Titles Act, R.S.O. 
1897, ch. 138, and sec. 102 of the Land Titles Act, 1 Geo. V. ch. 28, 
considered. 

The second chargee, the plaintiff, in order to free the land for the benefit of 
the first chargee, in 1903 executed a cessation of his second charge, and 
that cessation was registered. By it he expressly reserved his rights 
against his mortgagor, the defendant, both for payment of the moneys 
secured by the charge and upon the covenants contained in the charge: — 

Held, that the effect of the registration of the cessation was, upon sale by 
the first mortgagee, to give the purchaser an absolute ownership as to 
the land; but it left unimpaired the right of the plaintiff to proceed for 
the recovery of the amount due by the mortgagor, the defendant. 

Although the mortgagee suing on a covenant in the mortgage must ordin- 
arily be in a position to reconvey the land upon payment of what is due, 
that does not necessarily apply to the case of a second mortgagee whose 
rights against the land have been extinguished by the act of the first 
mortgagee. The inability of the mortgagee to convey will not bar the 
right of action on the covenant, if such inability arises from any default 
of the mortgagor. The mortgagor’s duty was to pay off the first mort : 
gage, and so prevent the exercise of the power of sale by which the 
equity of redemption was extinguished; and the loss of the land was 
occasioned, not by the action of the plaintiff in releasing his charge, but 
by the rights conferred upon the first mortgagee by his security, and 
by the default of the defendant himself. 

In re Burrell, Burrell v. Smith (1869), L.R. 7 Eq. 399, applied and 
followed. 

Palmer v. Hendrie (1860), 28 Bea/v. 341, distinguished. 

Judgment of Denton, Jun. Co.C.J., reversed. 

An appeal by the plaintiff from the judgment of Denton, 
Jun. Co. C.J., dismissing an action brought in the County Court 
of York for the recovery of $797.20, for principal and interest, 



D. C. 
1912 

April 6. 



146 



ONTARIO LAW REPORTS. 



D. C. 
1912 

Beatty 

V. 

Bailey. 



[VOL. 



upon the covenant implied in an instrument executed and regis- 
tered for the purpose of creating a mortgage or charge upon land 
made subject to the Land Titles Act, R.S.O. 1897, ch. 138, now 
1 Geo. V. ch. 28. 



The following reasons for judgment were given by Denton, 
Jun. Co. C.J. : — The facts of this case are not in dispute. On the 
26th August, 1891, the defendant executed a charge under the 
Land Titles Act in favour of the plaintiff and one Boulton, for 
the sum of $350 and interest, on property in Melbourne avenue, 
Toronto. This was a second mortgage; the first mortgage, for 
$1,350, being at that time held by one Ferguson. On the 9th 
October, 1891, Boulton transferred his interest in the said charge 
to the plaintiff, who thereby became the sole owner of the charge. 
The defendant, on the 27th August, 1891, conveyed his equity of 
redemption to on^e Sarah Morrison, who continued for a short time 
to pay the interest on the mortgages. On the 1st November, 
1892, Ferguson transferred his first mortgage to Janet Harvey. 
No interest or principal was paid on either of these mortgages 
subsequent to 1894. In 1903, Janet Harvey, the first mortgagee, 
sold the property, for a sum which was as much as could be got for 
the property at that time, but which was considerably less than 
her mortgage debt. In order to give a title, she had either to 
foreclose or obtain a release of the equity of redemption from 
Morrison and a discharge from the plaintiff, the second mort- 
gagee. She chose the latter course; and, on the 30th March, 
1903, Sarah Morrison transferred her equity of redemption to 
the first mortgagee. The plaintiff then executed a cessation or 
discharge of his mortgage, dated the 11th May, 1903. 

This cessation contains the following clause: “Now, there- 
fore, I hereby authorise the Master of Titles to notify on the 
register the cessation of the said charge as to the lands described 
therein, it being expressly understood that I, nevertheless, reserve 
all my rights, claims, and demands against the said George Bailey 
and Alexander Claude Foster Boulton and eithfer of them, his 
heirs, executors, administrators, and assigns, both for payment of 
the moneys secured by the said charge and upon the covenants 
contained in said charge and in the transfer thereof, and that this 
authority shall not release, prejudice, waive, or affect any other 



XXVI.] 



ONTARIO LAW REPORTS. 



147 



security or securities which I now have or which I may at any 
time hereafter obtain for the payment of the moneys secured by 
the said charge, it being my intention to retain all my rights, 
save the right to look to the said lands for the payment of the 
moneys secured by the said charge.” 

This action is brought on the covenant in the second mortgage 
to recover the principal and the interest that has accrued since 
1894. 

A discussion took place at the trial as to whether or not the 
action was barred by the Statute of Limitations. But, in the 
view I take of the case, it is unnecessary to consider that point. 

It seems to me that the plaintiff cannot recover, and that 
for the reason that every mortgagor has a right to have a 
reconveyance of the mortgaged property, upon payment of the 
money due upon the mortgage; and tha.t every mortgagee is 
charged with the duty of making such reconveyance upon such 
payment being made. Walker v. Jones (1866), L.R. 1 P.C. 50, 
is, I think, conclusive against the plaintiff’s contention. In that 
case, as here, the mortgagee discharged the lands and premises 
from the security which he held, but purported to reserve to him- 
self any other remedy or security which he had on promissory 
notes which the mortgage in question was given to secure. That 
is upon all fours with this case. Other cases upon the same line 
are: Allison v. McDonald (1893), 20 A.R. 695; Rourke v. Robin- 
son , [1911] 1 Ch. 480; Palmer v. Hendrie (1859), 27 Beav. 349; 
Perry v. Barker (1806), 13 Ves. 198; Gowland v. Garbutt (1867), 
13 Gr. 578; Munsen v. Hauss (1875), 22 Gr. 279; In re Thuresson 
(1902), 3 O.L.R. 271; Mendels v. Gibson (1905), 9 O.L.R. 94. 
These cases, it is true, are first mortgage cases, and it may he 
contended (though it was not dwelt upon in argument) that 
this rule does not apply to the case of a second mortgage. But, 
while there is, of course, a vast difference between a first and 
second mortgagee as regards the legal estate and the tenure and 
value of his security, is there any valid reason for refusing 
to apply this principle of law to each? A second mortgagee 
has vested in him an equity of redemption which he holds, as 
it were, in pledge. Upon repayment, the second mortgagee, by 
his discharge, revests in, or reconveys to, the person then en- 
titled to it, his interest in the mortgaged premises, which is the 



D. 0. 
1912 

Beatty 

v. 

Bailey. 



148 



ONTARIO LAW REPORTS. 



D. C. 
1912 

Beatty 

v. 

Bailey. 



VOL. 



equity of redemption. If the interest of the second mortgagee 
has been extinguished by the -foreclosure of the first mortgage, 
then manifestly he has, through no fault of his own, nothing to 
reconvey; but. where he voluntarily discharges his interest in 
the lands from his second mortgage, even although this is done 
to assist the first mortgagee to obtain a clear title, it is not plain 
to me that the same rule of law ought not to apply. 

In this case the plaintiff, by discharging the lands from 
the security which he held, voluntarily and effectually put it 
out of his power to reconvey his interest in the mortgaged 
premises. By that act, on the authorities cited, he has pre- 
cluded himself from recovering against the mortgagor on the 
covenant. 

The action will be dismissed with costs. 



April 1. The appeal was heard by a Divisional Court com- 
posed of Boyd, C., Latchford and Middleton, JJ. 

W. J. Elliott , for the plaintiff. No defence arises by reason 
of the Statute of Limitations. When the defendant released the 
land, he expressly reserved his rights under the covenant in re- 
spect of the moneys to be paid: In re Richardson (1871), L.R. 
12 Eq. 398. The mortgagor was still bound under the covenant 
to pay imposed by statute; and the action is, therefore, one 
founded on a specialty, and is not barred until after twenty years 
from default: Essery v. Grand Trunk R.W. Co. (1891), 21 O.R. 
224. See also R.S.O. 1897, ch. 138, sec. 107; and see the same 
section, as amended, 1 Geo. V. ch. 28, sec. 102, as to a seal being 
unnecessary. The learned County Court Judge has held that 
the plaintiff cannot recover, because every mortgagor has a right 
to have a reconveyance of the mortgaged property on payment 
of the money due upon the mortgage. But the inability of the 
mortgagee to reconvey will not bar the right of action on the 
covenant if such inability arises from any default of the mort- 
gagor: Coote’s Law of Mortgages, 7th ed., vol. 2, p. 982. If 
the mortgagor had paid off the first mortgage, the property would 
not have been sold under the power: In re Burrell , Burrell v. 
Smith (1869), L.R. 7 Eq. 399; Driffill v. McFall (1877), 41 U.C.R. 
313. 

W. C. Chisholm, K.C., for the defendant. The claim is barred 
by the Statute of Limitations, R.S.O. 1897, ch. 72, the debt no 



XXVI.] 



ONTARIO LAW REPORTS. 



149 



being a specialty debt. The judgment of the learned County 
Court Judge is right and should be affirmed. The mortgagee 
must always be in a position to reconvey the land upon pay- 
ment being made by the mortgagor. Here the plaintiff, by 
discharging the lands from the security which he held, negatived 
the possibility of reconveying. (Reference to the cases cited by 
the learned Junior Judge, supra.) 

Elliott, in reply. 

April 6. Boyd, C.: — The Land Titles Act was expressly de- 
signed to simplify titles and to facilitate the transfer of land; it 
is not intended to change or destroy civil rights and remedies. 
True it is that “ seals” were in effect abolished as a necessary 
part of any instrument affecting land, and the forms given in 
the Act or approved by the Act for the transfer and the mort- 
gaging or charging of land are to be without seals. This is in- 
tended to emphasise the fact that the virtue of the Act does not 
rest on the technical form and execution of the conveyance, but 
upon the fact of the instrument (whatever it is) being registered 
under the Act. It is the certificate of this registration held by 
the owner which corresponds to the ordinary possession of title 
deeds: R.S.O. 1897, ch. 138, sec. 101. 

Section 13 provides that the first registration of any person 
as owner of land with an absolute title shall vest in that person 
an estate in fee simple. Section 33 provides for the mortgaging 
of registered land thus: every owner may charge the land with 
the payment at an appointed time of any principal sum, which 
charge shall be completed by entering on the register the person 
in whose favour the charge is made as the owner of the charge. 
Section 34 provides that, where such a registered charge is created 
on land, there shall be implied on the part of the owner of the 
land, his heirs, executors, etc., a covenant with the owner of the 
charge to pay the principal sum charged. And, by sub-sec. 2, 
where any charge, whether under seal or not, is expressed to be 
made in pursuance of the Act respecting short forms of mort- 
gages, or refers thereto, then the form of words therein (according 
to the clauses numbered) shall have the same meaning and effect 
as are provided for in the Act as to short forms. 

By sec. 40 (3), on the certificate of the owner of a charge autho- 



rs C. 

1912 

Beatty 

v. 

Bailey. 



150 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Beatty 

Bailey. 

Boyd, C. 



rising the discharge of any part of the land therefrom or any 
part of the money secured thereby, the Master may note on the 
register the discharge of such land from the charge or the dis- 
charge of such part of the money. 

By sec. 41, every transfer of land under the Act is completed 
by entering on the register the transferee as owner; and till 
such entry the transferor shall be deemed to remain owner of 
the land. 

Section 101 provides for the creation of a lien on the land, 
that is, in equity such as would arise out of a deposit of the title 
deeds. 

Section 107 is thus expressed: “Notwithstanding the pro- 
visions of any statute, or any rule of law, any charge or transfer 
of land registered under this Act may be duly made under a charge 
or transfer without seal.” By amendment made after and not 
affecting this transaction, this section is remodelled by declaring 
that the charge or transfer may be duly made by an instrument 
not under seal, and if so made, the instrument and every agree- 
ment, stipulation and condition therein shall have the same 
effect for all purposes as if it were made under seal (Land Titles 
Act, 1 Geo. Y. ch. 28, sec. 102). 

By the rules annexed to the Act, No. 71 directs the use of the 
forms given in the schedule, and form No. 28 is the form (not 
under seal) used in this case by the owner, Bailey, when he mort- 
gaged to Beatty in August, 1891. That mortgage was to be paid 
in June, 1894, and in the case of an ordinary mortgage under seal 
the Statute of Limitations would bar at the end of twenty years 
— the mortgage being made before the 1st July, 1894 (R.S.O. 
1897, ch. 72, sec. 1, sub-secs. ( b ) and ( h )). In the form given by the 
Land Titles Act and in the instrument which was registered in this 
case there is nothing as to a covenant to pay; that term is sup- 
plied by the statute, in sec. 34, already quoted, i.e., such a 
covenant shall be implied as against the owner of the land who 
creates the charge which is completed by the fact of registra- 
tion. So that the obligation to pay, as by and under a covenant 
to pay, is to be regarded as a statutory obligation placed upon 
the owner for the benefit of the lender or chargee. 

The additions to sec. 107 made by 4 the amendment now ap- 
pearing in 1 Geo. V. ch. 28, sec. 102, may prove useful in litiga- 



XXVI.] 



ONTARIO LAW REPORTS. 



151 



tion arising upon the instrument in other jurisdictions; but do 
not seem to be needed in the present case. 

The registered charge which is created uno flatu with the 
covenant to pay included or implied by virtue of the statute, is 
to be regarded as the effective and completed instrument, binding 
both land and person so far as security for the money advanced 
is concerned; and, though the land may be discharged by an 
act of grace on the part of the chargee, that does not per se relieve 
the covenantor from the payment of the debt till after twenty 
years have elapsed without action to recover the claim. 

The release given by Beatty was limited to the land in ques- 
tion, and he expressly reserves his rights in respect of the moneys 
secured and to be paid. The effect is to free the land for the 
benefit of the first chargee, and so enable him to realise more 
speedily by sale of the estate, which was not worth what was 
due on the first charge. The effect of the registration of this 
cessation was, upon sale, to give the purchaser an absolute owner- 
ship as to the land, but to leave unimpaired the right of the 
plaintiff to proceed for the recovery of the amount due by the 
mortgagor, Bailey: In re Richardson , L.R. 12 Eq. 398; Bell v. 
Rowe (1901), 26 Viet. L.R. 511, per Madden, C.J. 

The obligation to pay rests upon the covenant or contract 
imposed by statute; and is, therefore, an action founded upon 
a specialty, within the meaning of the Statute of Limitations, 
and is not barred by lapse of time less than twenty years from 
the date of default (which at the earliest was in this case 1894): 
Cork and Bandon R.W. Co v. Goode (1853), 13 C.B. 826; Essery 
v. Grand Trunk R.W. Co., 21 O.R. 224, following Ross v. Grand 
Trunk R.W. Co. (1886), 10 O.R. 447. 

No defence, therefore, arises by virtue of any Statute of Limita- 
tions or lapse of time. 

The judgment below, therefore, should be entered against the 
defendant on this issue. 

The next defence, and the one to which effect was given by 
the County Court Judge, rests upon the equitable situation of 
the parties, which I proceed to consider. 

The first mortgagee had a power of sale by the terms of the 
mortgage and the statutory charge, and could enforce a sale 
against the mortgagor. It may be that the concurrence of the 



D. C. 
1912 

Beatty 

v. 

Bailey. 

Boyd, O. 



152 



ONTARIO LAW REPORTS. 



D. C. 
1912 

Beatty 

v. 

Bailey. 

Boyd, C. 



[VOL. 



then owner of the equity of redemption and the second mort- 
gagee assisted in the more inexpensive way of realising upon the 
property; but it is undoubted that the land was disposed of by 
the paramount act of the first mortgagee; and the law is, that, 
if a surplus remains unpaid after the exercise of a power of sale, 
the mortgagee may sue for its recovery by action on the covenant: 
Rudge v. Richens (1873), L.R. 8 C.P. 358. The release of the land 
by the second chargee was only to facilitate either the foreclosure 
or the sale of the property by the first mortgagee — as it appeared 
then that the land was not of value to satisfy even the first mort- 
gage. Had the land been foreclosed by the first mortgagee, 
that change of the property would not have interfered with The 
right of the second mortgagee (who was not to blame) to sue 
upon the covenant. No doubt the rule is, that the mortgagee 
suing on a covenant in the mortgage must ordinarily be in a 
position to reconvey the land upon payment of what is due. 
But that does not necessarily apply to the case of a second mort- 
gagee whose rights against the land have been extinguished by 
the act of the first mortgagee. The law is summarised in Coote 
thus, that the inability of the mortgagee to reconvey will not bar 
the right of action on the covenant if such inability arises from 
any default of the mortgagor: 7th ed., vol. 2, p. 982. The 
mortgagor’s duty was, here, to pay off the first mortgage, and 
so prevent the exercise of the power of sale by which the equity 
of redemption was extinguished. I think the principles of deci- 
sion acted on in in re Burrell, Burrell v. Smith, L.R. 7 Eq. 399, 
466, apply to this case and go to invalidate the judgment pro- 
nounced by the learned County Court Judge. 

I think judgment should be entered for the amount claimed 
with costs and costs of appeal. 



Latchford, J.: — I agree. 

Middleton, J.: — I entirely agree with my Lord the Chan- 
cellor, and only desire to add a few words out of respect to the 
learned Judge whose decision we are reversing. 

The right of the mortgagor, when sued upon a covenant, to 
demand a reconveyance of the mortgaged property, discussed in 
Kinnaird v. Trollope (1888), 39 Ch.D. 636, and the cases there 
cited, and the equitable right to restrain such action when the 
mortgagee has put it out of his power to convey, cannot, it seems 



XXVI.] 



ONTARIO LAW REPORTS. 



153 



to me, be invoked where the inability to reconvey arises from 
the default of the mortgagor himself. Here the non-payment 
of the first mortgage made the estate of the mortgagee absolute 
at law, and made the right of the plaintiff, as second mortgagee, 
liable to foreclosure in equity. 

I do not think that the consent given by the plaintiff to the 
immediate exercise by the first mortgagee of his right to sell the 
lands operates to release the covenant. He has at most waived 
the taking of formal legal proceedings by the first mortgagee, 
which would not be to the advantage of any one; and, more- 
over, in his waiver he has expressly reserved his rights against 
the mortgagor. 

It is clear, to me at least, that the loss of the property was 
occasioned, not by the action of the plaintiff, but by the rights 
conferred upon the first mortgagee by his security, and by the 
default of the defendant himself. This brings the case within 
the principle enunciated in In re Burrell, Burrell v. Smith, L.R. 
7 Eq. 399. 

In Palmer v. Hendrie (1860), 28 Beav. 341, the plaintiff failed 
to recover because he assented to the purchase-money being paid 
to the owner of the equity of redemption, instead of insisting 
upon it being applied in discharge of the mortgage debt. It was 
this, and not the concurrence in the sale, that was deemed im- 
proper 



D. C. 
1912 

Beatty 

v. 

Bailey. 

Middleton, J. 



Appeal allowed. 



154 



ONTARIO LAW REPORTS. 



D. C. 
1912 

April 10 




[DIVISIONAL COURT.] 

Rudd v. Cameron. 

Slander — Words Spoken of Plaintiff in Reference to his Trade — Publica- 
tion — Speaking Brought about by Action of Plaintiff — Publication — 
Evidence for Jury — Privileged Occasion — Absence of Belief in Truth 
of Words — Malice — Damages — Quantum. 

In an action for defamatory words alleged to have been spoken by the 
defendant of the plaintiff in the way of his trade, the plaintiff testi- 
fied that, having learned that statements injuriously affecting him 
were in circulation, and being unable to trace them to their source, he 
employed two detectives “for the purpose of ascertaining the facts 
and getting information for his solicitors.” The detectives, having made 
the acquaintance of the defendant, told him that they were going to 
erect a club house, and that the plaintiff was anxious to secure the 
contract for building it. It was upon what the defendant then said 
that the action was based: — 

Held, that, although the speaking of the words was brought about by the 
action of the plaintiff, there was evidence of publication for the jury. 
Review of the authorities. 

Duke of Brunswick v. Harmer (1849), 14 Q.B. 185, followed. 

Held, also, that, although the occasion on which the words were spoken 
was privileged, there was evidence, which the jury believed, that there 
was no truth in the statements made by the defendant; and evidence 
that he knew that they were untrue, or that he made them recklessly, 
not caring whether they were true or false; and evidence from which 
malice might be inferred. 

Held , also, that, while the damages assessed by the jury ($1,000) were 
substantial, they were not, in view of the defendant’s conduct through- 
out and his not having gone into the box to testify on his own behalf, 
so excessive as to warrant the Court in setting aside the verdict. 
Judgment of Britton, J., upon the verdict of a jury, affirmed. 

An appeal by the defendant from the judgment of Britton, 
J., of the 15th November, 1911, in favour of the plaintiff, upon 
the verdict of a jury at the trial at Pembroke, in an action for 
defamatory words alleged to have been spoken by the defendant 
of the plaintiff in the way of his trade. 

February 27. The appeal was heard by a Divisional Court 
composed of Meredith, C.J.C.P., Teetzel and Kelly, JJ. 

W. M. Douglas, K.C., for the defendant, argued that there 
was no evidence of publication, and that the words were spoken 
on a privileged occasion, and there was no evidence of malice. 
In any event, the damages, if any, should have been merely nom- 
inal. On the question of publication, he contended that, where 
the plaintiff procures some one to go to the defendant for the 
purpose of provoking him to utter defamatory words, there is no 
publication. In support of this proposition he cited Starkie on 



XXVI.] 



ONTARIO LAW REPORTS. 



155 



Slander, 3rd ed., pp. 381 and 514, where the cases of King v. 
Waring (1803), 5 Esp. 13, and Smith v. Wood (1813), 3 Camp. 323, 
are referred to; and Weather ston v. Hawkins (1786), 1 T.R. 110. 

E. F. B. Johnston, K.C., for the plaintiff, urged that there was 
sufficient evidence of malice to take away the qualified privilege. 
He also pointed out that there had been no evidence called for 
the defence. As to publication, it was true that there were cases 
which said that if a trap were laid to make a man say what he 
would not have said voluntarily, there would be no publication. 
But here there had been no trap laid. The detectives did not go 
to the defendant to get him to make the slanderous statements, 
but to find out if he had been making them. There had been 
publication in this case. He referred to Duke of Brunswick v. 
Harmer (1849), 14 Q.B. 185. 

Douglas, in reply, referred to Odgers on Libel and Slander, 
5th. ed., p. 296. 

April 10. The judgment of the Court was delivered by 
Meredith, C.J.: — The appeal is rested upon two grounds: (1) 
that there was no evidence of publication; and (2) that the 
occasion upon which the words were spoken was privileged and 
there was no evidence of malice; and it was also contended that 
the damages awarded ($1,000) are excessive. 

According to the testimony of the respondent, having learned 
that statements affecting him similar to those alleged to have 
been made by the appellant, and which form the basis of the action, 
were in circulation, and being unable to trace them to their source, 
he employed two detectives “for the purpose of ascertaining the 
facts and getting information for his solicitors,” which I under- 
stand to mean for the purpose of finding out the author of the 
statements and bringing an action against him. 

The detectives, having made the acquaintance of the appellant, 
adopted the ruse of telling him that they were going to erect a 
club house in the vicinity of Arnprior, and that the respondent 
was anxious to secure the contract for building it. Their object, 
no doubt, was to induce the appellant to speak his mind as to the 
respondent, and in this they appear to have succeeded, for it is 
upon what was then said by the appellant that the action is based. 

The occasion upon which the words were thus spoken was 



D. C. 
1912 

Rudd 

v. 

Cameron. 



156 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Rudd 

v. 

Cameron. 
Meredith, C.J. 



privileged; but it is contended by the learned counsel for the 
appellant that, the speaking of them having been brought about 
by the action of the respondent himself, there was no publication; 
and in support of that contention he cited King v. Waring, 5 Esp. 
13; Smith v. Wood, 3 Camp. 323, 14 R.R. 752; and Starkie on 
Slander, 3rd ed., pp. 381 and 514. 

King v. Waring was an action for a libel contained in a letter 
written by the female defendant, and Lord Alvanley, C.J., having 
stated that it had been decided that giving a character to a servant 
however injurious to him, yet if fairly given, would not sustain 
an action, went on to say: “But if the letter was procured by 
another letter, not written with a fair view of inquiring a char- 
acter, but to procure an answer, upon which to found an action 
for a libel, such evidence, I think, ought not to be admitted;” 
but, as the learned Judge held that this was not proved, his state- 
ment is but an obiter dictum . 



In Smith v. Wood, the action was for a libel upon the plaintiff 
in the shape of a caricature print entitled, “The inside of a parish 
workhouse with all abuses reformed.” A witness having stated 
that, having heard that the defendant had a copy of this print, 
he went to his house and requested liberty to see it, and the de- 
fendant thereupon produced it, and pointed out the figure of the 
plaintiff and the other persons it ridiculed; and this, Lord Ellen- 
borough ruled, was not sufficient evidence of publication to support 
the action; and the plaintiff was nonsuited. 

It does not appear from this statement of the facts that the 
plaintiff had sent the witness to request liberty to see the carica- 
ture. Mr. Odgers, however, in his work on Libel and Slander, 
5th ed., p. 179, states as the facts of the case that “the plaintiff, 
hearing that defendant had in his possession a copy of a libellous 
caricature of the plaintiff, sent an agent who asked to see the pic- 
ture, and the defendant shewed it to him.” 



In stating that the person to whom the caricature was shewn 
was sent to request that it should be shewn, Mr. Odgers is, I think, 
in error; and in this view I am supported by the report of the 
case and by what appeared in the earlier editions of Mr. Starkie’s 
treatise, where attention is called to the fact that “there was no 
evidence to shew that the plaintiff was in privity with the witness : ” 
2nd ed., vol. 2, p. 87, note (i). In the same edition, vol. 1, p. 456, 






XXVI.] 



ONTARIO LAW REPORTS. 



157 



the facts of the case are stated as they appear in the report in 3 D - c - 

1912 

Camp. See also 3rd ed., p. 381, and note (i) on p. 514; 4th ed. 

(Folkard), p. 374, note (s), p. 524, note (n); 5th ed. (Folkard) Rudd 
p. 409, note (/), p. 441, note k.; 6th ed. (Folkard), p. 409, note Cameron. 

'(/)> mid p. 441. ^ Meredith, C.J. 

In the last edition of Folkard (7th ed.), Smith v. Wood is re- 
ferred to, on pp. 166 and 263. In this edition the matter has been 
re-arranged, and the reference on p. 166 appears in chapter 11, 
which deals with communications in discharge of duty; and the 
statement in the text is, that, “ where the publication of the de- 
famatory matter was procured by the contrivance of the plaintiff, 
with a view to the foundation of an action against the defendant, 
the communication may be privileged on the ground that the 
plaintiff himself was the voluntary author of the mischief com- 
plained of;” and Smith v. Wood, Weatherston v. Hawkins, 1 T.R. 

110, and Warr v. Jolly (1834), 6 C. & P. 497, are referred to as 
the authority for the statement. 

The dictum of Lord Alvanley, C.J., in King v. Waring, and 
what was said by him in Rogers v. Clifton (1803), 3 B. & P. 587, 
at p. 592, are also referred to for the statement that, “ where a 
plaintiff, knowing the character which his master will give, pro- 
cures it to be given for the sake of founding an action upon it, 
lie will not be allowed to recover.” 

The reference on p. 263 is merely a statement of the facts of 
Smith v. Wood and of the ruling of Lord Ellenborough, C.J., as 
reported in 3 Camp. 

It would appear, therefore, that the first ground of appeal has 
no judicial decision, but only the dictum of Lord Alvanley, C.J., in 
King v. Waring, to support it. 

Mr. Odgers points out (p. 180) that “in many of the older 
cases-the Judges say, ‘there is no sufficient publication to support 
the action/ when they mean in modern parlance that the pub- 
lication was privileged by reason of the occasion;” and this may 
have been what was meant by Lord Alvanley, C.J., as, I think, 
appears from what was said by him in Rogers v. Clifton, 3 B. & P. 

587, at p. 592. That was an action by a servant against his 
former master for an alleged libel contained in a letter written 
by the master to a Mr. Hand, to whom the plaintiff had applied 
for a place, and Lord Alvanley, speaking of this, said: “It is 



158 



ONTARIO LAW REPORTS. 



B. C. 
1912 

Rudd 

v. 

Cameron. 

Meredith, C.J. 



[VOL. 



material also to observe that, when the plaintiff in this case applied 
to Mr. Hand for his place, and referred him to the defendant, he 
did not tell him that the defendant would give him a good char- 
acter; had he done so, I should have suspected that he wished to 
lay a trap for the defendant, and procure evidence to support this 
action; in such a case I should hold a party not at liberty to ascribe 
the character given by his master to malice, when he had only 
drawn from him that which he had a right to expect.” 



However this may be, in the comparatively recent case of 
Duke of Brunswick v. Harmer (1849), 14 Q.B. 185, a different view 
was taken by the Court of Queen’s Bench. The action was for 
libel published in a newspaper more than seventeen years before 
action; the Statute of Limitations was pleaded, and it was held 
that it was negatived by proof that a single copy had been pur- 
chased from the defendant for the plaintiff by his agent within 
six years. The libel was originally published in 18,30; two copies 
of the newspaper were produced at the trial; one copy had been 
obtained from the British Museum, and the other had been pur- 
chased, before the commencement of the action in 1848, at the 
newspaper office of the defendant, by a witness who on cross- 
examination stated that he had been sent by the plaintiff tq make 
the purchase and had handed the paper when purchased to the 
plaintiff. It was contended by the defendant that this latter was 
not such a publication as would support the issue. The presiding 
Judge overruled the objection. On a motion for a new trial the 
objection was renewed, and it was argued by counsel for the de- 
fendant that the publication proved was in law a publication to 
the plaintiff himself, and that it could not be the foundation of a 
civil action. Coleridge, J., in delivering the judgment of the 
Court, after referring to the facts and the contention of the de- 
fendant’s counsel, said: “And, in some sense, it is true that it 
was a sale and delivery to the plaintiff; but we think it was also 
a publication to the agent. . . . The defendant, who, on the 

application of a stranger, delivers to him the writing which libels 
a third person, publishes the libellous matter to him, though he 
may have been sent for the purpose of procuring the work by that 
third person . . . The act is complete by the delivery; and 

its legal character is not altered, either by the plaintiff’s procure- 
ment or by the subsequent handing over of the writing to him. 



XXVI.] 



ONTARIO LAW REPORTS. 



159 



Of course that this publication was by the procurement of the D - °- 
plaintiff is not material to the question we are now considering.” 1912 

In the view of Mr. Odgers, pp. 179-180, this case, so far as the R ^ DD 

question of publication merely is concerned, overrules King v. Cameron. 
Waring and Smith v. Wood; and Sir Frederick Pollock’s note to Meredith, c.j. 
Smith v. Wood (14 R.R. 752) is, that Lord Ellenborough’s ruling 
“does not seem consistent with Duke of Brunswick v. Harmer.” 

Neither King v. Waring nor Smith v. Wood was cited or re- 
ferred to in Duke of Brunswick v. Harmer; the former probably 
for the reason suggested by Mr. Odgers, that it related only to the 
question of privilege; and the latter for the same reason, if the 
facts of it were as stated by Mr. Odgers, or for the reason that it 
had no application, if the facts were as stated in the report in 
3 Camp. 

The question has been discussed and passed upon in many 
cases in the United States, and among them in Gordon v. Spencer 
(1829), 2 Blackf. (Ind.) 286, 288; Yeates v. Reed (1838), 4 Blackf. 

(Ind.) 463, 465; Jones v. Chapman (1839), 5 Blackf. (Ind.) 88; 

Haynes v. Leland (1848), 29 Me. 233, 234, 243; Sutton v. Smith 
(1850), 13 Mo. 120, 123, 124; Nott v. Stoddard (1865), 38 Vt. 25, 

31; Heller v. Howard (1882), 11 111. App. 554; White v. Newcomb 
(1898), 25 App. Div. N.Y. 397, 401; O’Donnell v. Nee (1898), 

86 Fed. Repr. 96; Railroad v. Delaney (1899), 102 Tenn. 289, 

294, 295; and Shinglemeyer v. Wright (1900), 124 Mich. 230, 240. 

See also Cyc., vol. 25, pp. '370-1. In most of these cases the 
supposed ruling of Lord Ellenborough, C.J., in Smith v. Wood 
and the opinion expressed by Lord Alvanley, C.J., in King v. 

Waring were recognised as correct statements of the law, and 
followed. 

Upon the whole, we are of opinion that we should follow 
Duke of Brunswick v. Harmer, and, following it, hold that there 
was evidence for the jury of publication, and that the first objec- 
tion, therefore, fails. 

The second ground of appeal also fails; there was evidence, 
which the jury believed, that there was no truth in the statements 
made by the defendant; and there was ample evidence, out of the 
appellant’s own mouth on his examination for discovery, that he 
knew they were untrue, or that he made them recklessly, not caring 
whether they were true or false; and there was evidence from which 



160 


ONTARIO LAW REPORTS. [vol. 


D. C. 
1912 


malice might be inferred, in the bad feeling which had existed on 
the part of the appellant towards the respondent, and his state- 


Rudd 

V. 

Cameron. 


ments to the respondent’s book-keeper and stenographer, Alice 
Miller. 


Meredith, C.J. 


The damages are substantial; but, in view of the appellant’s 
conduct throughout and his not having gone into the box to testify 
on his own behalf, we cannot say that they are so excessive as to 
warrant the Court in setting aside the verdict. 

The appeal is dismissed with costs. 


1912 


[IN CHAMBERS.] 

Re Const antineau and Jones. 


April 11. 

% 


Costs — Crimlinal Proceedings — -Order for Payment by Prosecutor of Costs 
of Accused — Taxation — Right of Appeal — Criminal Code, secs. 689, 1047 
— Construction of Order — Right to Costs of Preliminary Inquiry be- 
fore Police Magistrate — Mandatory Order. 

No appeal lies from the taxation of costs pursuant to an order of the 
Court, under sec. 689 of the Criminal Code, for payment by the prose- 
cutor of the costs of the accused. 

Section 1407 of the Criminal Code is wide enough to apply to all costs 
ordered to be paid under any of the earlier provisions of the Code; 
and, there being no tariff of fees provided with respect to criminal 
proceedings, the tariff in force with respect to the costs of civil pro- 
ceedings is applicable; but the right of appeal given in civil cases is 
not made to apply by the mere introduction of the civil tariff. 

The order for payment of costs recited the information laid against the 
accused before a Police Magistrate, the committal of the accused for 
trial, and the notice of discontinuance given by the complainant; and 
the award was “of the costs occasioned by the said proceedings:” — 
Held, that the order adequately awarded the costs of the preliminary in- 
quiry before the Police Magistrate; and that, upon the true construc- 
tion of sec. 689, where costs are awarded in general terms, these include 
the costs of the appearance on the preliminary inquiry. 

A mandatory order was made directing the local officer who had taxed the 
costs under the order to tax and allow to the accused his costs of the 
preliminary proceedings before the Police Magistrate. 

An information was laid by Const antineau against Jones 
before the Police Magistrate at L’Orignal for the publication of 
a defamatory libel. Jones was committed for trial, and at the 
assizes was surrendered by his bail; but, the prosecutor not 
appearing, was discharged; and an order was made by Latch- 
ford, J., for the recovery by the accused (Jones) from the prose- 
cutor (Constantineau) of his (Jones’s) costs occasioned by the 
proceedings, the same to be taxed. 



XXVI.] 



ONTARIO LAW REPORTS. 



161 



A bill of costs was brought in before the Local Registrar 
covering the proceedings before the Police Magistrate, as well 
as those at the assizes; but the Local Registrar, upon taxation, 
disallowed entirely the costs of the proceedings before the Police 
Magistrate, and largely reduced the bill in respect of the costs 
incurred at the assizes. 

Jones appealed from the taxation. 

April 9. The appeal came on for hearing before Middleton, 
J., in Chambers. 

G. A. Urquhart, for the appellant. 

H. S. White, for Constantineau, objected that there was no 
appeal from the taxation, as the proceedings were under the 
Criminal Code, and the provisions of the Consolidated Rules 
did not apply. 

April 11. Middleton, J. (after setting out the facts as 
above): — I think this objection is well taken. The section of 
the Criminal Code under which the order for payment of these 
costs was made is sec. 689.* It merely gives authority to direct 
payment of costs. Section 1047, f I think, is wide enough to 
apply not only to costs ordered to be paid under secs. 1044 and 
1045, but to apply to all costs ordered to be paid under any of the 
earlier provisions of the Code. This section indicates that where 
there is no tariff provided in respect to criminal proceedings, 
costs shall be taxed according to the lowest scale of fees allowed 
in the Court in which the proceeding is had in a civil suit. Power 
is given under sec. 576 to the Court to provide by general rule 
for the costs to be allowed; but no tariff has been promulgated 
under the Code; and, therefore, the tariff applicable in civil pro- 
ceedings, and provided by the Judicature Act and Rules, is 
applicable; but under the Code no appeal is given, nor is the 
right of appeal which is found in civil cases made to apply by 
the mere introduction of the civil tariff. 

* 689. If the prosecutor so bound over at his own request does not 
prefer and prosecute such an indictment, or if the grand jury does not find 
a true bill, or if the accused is not convicted upon the indictment S') pre- 
ferred, the prosecutor shall, if the court so direct, pay to the accused person 
his costs, including the costs of his appearance on the preliminary inquiry. 

t 1047. Any costs ordered to be paid by a court pursuant to the fore- 
going provisions shall, in case there is no tariff of fees provided with respect 
to criminal proceedings, be taxed by the proper officer of the court according 
to the lowest scale of fees allowed in such court in a civil suit. 



Middleton, J. 

1912 

Re 

Constan- 

tineau 

and 

Jones. 



162 



ONTARIO LAW REPORTS. 



Middleton, J. 

1912 

Re 

Const an - 

TINEAIT 

AND 

Jones. 



[VOL. 



Upon the argument it was suggested that another remedy 
might be open to the applicant, in so far as the Taxing Officer 
has failed to allow anything for the costs incurred upon the 
preliminary inquiry. 

I am quite clear that, in the absence of any appellate juris- 
diction, I have no right to interfere with the discretion of the 
officer whose duty it is to tax these costs; but it seems to me 
to be equally plain that where the Taxing Officer has failed to 
discharge his function at all, and has failed to make any allow- 
ance for the costs of the preliminary inquiry, the applicant has 
the right to come to this Court to compel the officer to exercise 
his function; and it was arranged by counsel that, to save the 
expense of another application, this may be treated as a motion 
for a mandatory order, and that I should deal with the questions 
which would be open upon such an application. 

The Taxing Officer has proceeded upon the theory that the 
trial Judge did not intend to award the costs of the preliminary 
inquiry, and that the language used in the judgment is not suffi- 
cient to award these costs. I have had the opportunity of con- 
sulting the learned trial Judge, and he tells me that it was his 
intention to make an unrestricted award of all costs over which 
he had any jurisdiction; and I think that the judgment adequately 
awards the costs of the preliminary inquiry. 

The formal judgment entered recites the information before 
the Police Magistrate and the committal and the notice of dis- 
continuance given by the complainant; and the award is “of 
the costs occasioned by the said proceedings.” 

In the second place, I think that, upon the true construction 
of sec. 689, where costs are awarded in general terms, these in- 
clude the costs of the appearance on the preliminary inquiry. 
The word “including” is equivalent to, “which are to include.” 
It would have been well, when the judgment was settled, to have 
avoided any question by following the precise words of the 
statute; but, when I find that the words are capable of the wider 
meaning, and that the learned trial Judge intended his judgment 
to have the wider meaning, I have no hesitation in giving to the 
words used a meaning which conforms to the actual intention. 

The motion thus amended will be dealt with by determining 
that I have no appellate jurisdiction, and cannot, therefore, deal 



XXVI.] ONTARIO LAW REPORTS. 163 

with the appeal, as an appeal; but a mandatory order will go Mld <^on> J - 
to the local officer directing him to tax and allow to the applicant 1912 
(Jones) his costs of the preliminary proceedings before the Police 
Magistrate. As success is divided, I make no award of costs. Constan- 

TINEAU 

AND 

Jones. 



[IN THE' COURT OR APPEAL.] 

Re Mountain. 

Will — Construction — Secured Debts — Postponement of Payment — Accumu- 
lation of Income — Exoneration of General Estate — Charitable Gift — 
Immediate Vesting — Condition — Gift over to Charity — Rule against 
Perpetuities — Restraint on Alienation — Election between Gifts — Ques- 
tions for Determination upon Summary Application for Construc- 
tion of Will — Costs. 



C. A. 
1910 

Nov. 14. 
1912 

April 15. 



The testator, who died in 1910, by his will, made in 1902, directed that his 
just debts and general expenses should be paid as soon as possible after 
his decease; but that the payment of debts secured by mortgages on 
real estate or for which his bank stock had been temporarily trans- 
ferred should be postponed until they had been paid off from the in- 
come of his estate; and that none of his bank stock or other securities 
were to be sold, but were to be distributed according to their market 
value at the time of distribution. He also directed that his real 
estate in the Isle of Wight was not to be sold till after a tunnel or 
bridge should be made between the island and the mainland, if such 
should be made within the lifetime of any of his executors or twenty- 
one years after. He then gave all his property to his executors, “after 
payment of my just debts and funeral expenses as aforesaid, to be 
held in trust for certain purposes specifically set out in a number of 
separate paragraphs. The first was, out of the revenue of his property 
to pay his wife £150 a year, and to allow her the use, rent free, dur- 
ing her life, of “Pinehurst House, furnished, or of whichever house of 
mine may be our home at time of my decease.” In the 11th paragraph, 
he specified a number of parcels of real estate, and directed that all 
these should be conveyed to the Synod of the Diocese of Ottawa to be 
held by the Synod in trust for an endowment of the bishopric of Corn- 
wall, “whenever the Bishop of Cornwall is being appointed. If the 
yearly income from said properties, together with any other official 
income from whatever source, be insufficient to produce a salary of 
$2,000 a year for a suffragan Bishop or $3,000 yearly for an inde- 
pendent Bishop . . . the income of my sixty Hudson Bay shares 
. . . or such part ... as may be requisite shall be applied 

towards the same object.” Paragraph 12: “But if it be unnecessary for 
said purpose so to apply the income of said sixty Hudson Bay shares 
. . . I hereby bequeath these . . . shares to the University of 
Bishop’s College, Lennoxville ... to found and endow ... a 
Mission Fellowship.” Paragraph 19 : “ . . . As soon as the obli- 

gations on my personal and real estate have been discharged, including 
the payment of $5,000 to the University of Windsor, N.S., for which 
I gave ‘my note of hand,’ then all my real estate in” (three specified 
places) “shall be transferred to the Synod of the Diocese of Ottawa to 
be held in trust for the proposed new Diocese o,r suffragan Bishop of 
Cornwall . . . subject to the claim of residence, in one or other of 
my houses, of my . . . wife . . . After all existing claims on 
my estate real and personal as hereinabove described shall have been 
satisfied then the accumulation of all rents shall be safely invested to 



164 



ONTARIO LAW REPORTS. 



[VOL. 



form a fund for duly fitting up the house” (describing it) “as a suit- 
able residence for the future Bishop of Cornwall . . . Para- 

graph 20: “I have made all the above bequests to the suffragan bish- 
opric or independent See of Cornwall . . . But if the appoint- 

ment ... of such a bishop do not take place within twenty-five 
years after my death . . . the properties which had been intended 
for the endowment of the See of Cornwall shall also by transfer become 
the property of Bishop’s 'College, Lennoxville, subject to” (certain 
charges) “and in trust towards the endowment of a Professorship of 
Natural Science.” Upon appeal from an order made upon summary 
application under Con. Rule 938: — • 

Held, that the gift to the Synod was not void as offending the rule 
against perpetuities: it was a vested charitable gift, but to be divested 
in a certain event, also in favour of a charity. 

Held, also, that the income might be applied to the exoneration of the 
general estate, to the extent, if any, to which it might be called upon 
to answer the secured debts. 

Held, as to conditions in the will said to be in restraint of sale of certain 
portions of the testator’s estate, and as to the alleged obligation of the 
testator’s widow to elect between the gifts to her of a life estate in the 
testator’s Cornwall house and in a house in the Isle of Wight, that 
the questions submitted could not be determined upon the present 
application. 

Held, also, that the Court should not disturb the disposition of the costs 
made by the order in appeal, by giving the Synod costs as between solici- 
tor and client. 

Per Moss, 'C.J.O.: — In such cases, the award of costs as between solicitor 
and client is generally confined to the applying trustee or executor. 

Judgment of Boyd, C., varied. 



C. A. 
1910 

Re 

Mountain. 



Motion by the executors of the will of the Reverend Jacob 
Jehoshaphat Salter Mountain, deceased, upon originating notice, 
for an order determining certain questions arising in the admin- 
istration of the estate of the deceased, involving the construction 
of his will and codicils. 



The testator died on the 1st May, 1910. His will was dated 
the 25th June, 1902. The material parts of it were as follow: — 
lstly. I will and direct that all my just debts and the expenses 
of my funeral . . . be fully paid and discharged as soon as 
possible after my decease. 

Nevertheless the payment of debts secured by mortgages 
on real estate, whether in Canada, the Isle of Wight, or elsewhere, 
or those for which an equivalent portion of my bank stock has been 
temporarily transferred, shall be postponed until they have been 
paid off from the income of my estate. And none of my bank 
stock or other securities are to be sold, but are to be distributed 
according to their market value at the time of distribution. 

My real estate in England or the Isle of Wight is not to be 
sold till after a tunnel or bridge is made between said Isle and the 
mainland (if such should be made within the lifetime of my 



XXVI.] 



ONTARIO LAW REPORTS. 



165 



executors or twenty-one years after), after which time it may 
be sold, if my executors should consider that such sale would 
benefit my estate. 

2ndy. I will devise and bequeath to my executors all my 
property estate and effects real and personal movable and immov- 
able of whatsoever kind or nature and wheresoever situated or to 
be found which may belong to me at the time of my decease after 
payment of my just debts and funeral expenses as aforesaid to 
be held in trust for the following purposes, that is to say: — 

1st. Out of the revenue thereof, to pay to my wife Louisa 
Mira yearly (for as long a time as she may outlive me, except as 
hereinafter provided) one hundred and fifty pounds, the same as 
I mentioned in a codicil to my last will which codicil was signed 
after our marriage at Shanklin, Isle of Wight, and a duplicate of it 
left with her sister Kate, said sum to include her right of dower, 
and to be made up partly of what would be a fair rent for my 
executors to charge on my property now called “Mira Cottage” 
on the Winthrop Highlands, in the suburbs of Boston, Mass. — or 
in case of this property being sold, of five per cent, interest on 
the proceeds. . . . 

She is also to have the use, rent free, during the time of her 
natural life, of this “Pinehurst House,” furnished, or of whichever 
house of mine may be our home at time of my decease. . . . 

2nd. To pay four thousand dollars towards the endowment 
of the “Bishop George Jehoshaphat Mountain Memorial Mission 
Fund” now in process of formation for the support of Missions 
within the territory which now forms the Diocese of Quebec — so 
soon as another four thousand dollars shall have been added to 
said fund by individual subscribers after my death. . . . 

[Then followed a number of small legacies.] 

9th. To allow the Rev. S. Gower Poole, or the future Rector 
or Rectors of the Church of the Good Shepherd, to reside in the 
house now occupied by him, unless Cornwall should become the 
See of a Diocese or a suffragan bishopric, in which case I desire 
his present abode to become the episcopal residence, when he 
(unless he were the chosen bishop) or his successor in office would 
have to return to his former residence . . . 

10th. Two shares of my Montreal bank stock to be transferred 
to the names of “the Rector and Church Wardens of the Church 



C. A. 
1910 

Re 

Mountain. 



166 



ONTARIO LAW REPORTS. 



[VOL. 



C - A - of the Good Shepherd” and the interest of said shares to be used 
1910 for repairs to said Church and the houses thereto belonging. 

Re This is to be called “the Church and Church Property repair 

Mountain. j ^ 

fund. 

11th. All the property purchased by me from the executors 
of the John Purcell estate — also lot No. 2 on Second street, form- 
erly known as “the Cattanach property” but now belonging to 
me (on which I would recommend the erection of two double 
semi-detached houses and one single house) — Also my property 
on “First” and “Amelia” streets bordering on or opposite to the 
“Central Park” — Also my property No. 2 on Park Avenue 
Winthrop Highlands near Boston Mass. U.S. (after the death of 
my dear wife, who meanwhile has the profits) — Also the tract of 
Prairie land half a mile square more or less, which I hold near 
Qu’Appelle, N.W.T. — if still unsold, or, if sold, the proceeds of 
the sale — Also my properties in the Isle of Wight, England, if 
still unsold, or, if sold, the proceeds of the sale or an equivalent 
thereto — All these properties I desire to be legally conveyed to 
the Synod of the Diocese of Ottawa to be held in trust by said 
Synod for an endowment of the bishopric of Cornwall whenever 
the Bishop of Cornwall is being appointed, whether as an inde- 
pendent Bishop or as a suffragan to the Bishop of Ottawa. If 
the yearly income from said properties, together with any other 
official income from whatever source, be insufficient to produce 
a salary of two thousand dollars a year for a suffragan Bishop or 
three thousand dollars yearly for an independent Bishop, then, 
in such case, the income of my sixty Hudson Bay shares (the 
certificates of which are now deposited, for safe keeping, with the 
Parr’s Bank Limited in the Consolidated Bank Building, Thread- 
needle Street, London, E.C., which also receives and places to 
my credit account the yearly dividends) or such part of the said 
income of these 60 shares as may be requisite shall be applied 
towards the same object. 

12th. But if it be unnecessary for said purpose so to apply 
the income of said 60 Hudson Bay shares (which must in time 
become more and more valuable in proportion as the value of 
land increases in these territories and which shall not be sold, 
nor any of my previously mentioned properties in Cornwall, 
during the lifetime of the Rev. Arthur Jarvis or that of any of his 



XXVI.] 



ONTARIO LAW REPORTS. 



167 



children now living and twenty-one years after), then in this c - A - 

case I hereby bequeath these Hudson Bay shares to the University 

of Bishop’s College, Lennoxville, and constitute said corporation Mou ^ AIN 
my residuary legatee, so far as said shares are concerned, upon 
the following trust and conditions that is to say: To found and 
endow in said college a Mission Fellowship whose Fellow shall be 
appointed, and his duties assigned as follows . . . 

The stipend of the Mission Fellow shall, to the extent of 
twelve hundred dollars a year, be the first charge on said Hudson 
Bay shares. The Mission Fellow shall be called “The Jacob 
Mountain Mission Fellow of Bishop’s College Lennoxville.” 

13th. If and as soon as from the above named and other 
available sources a larger income than two thousand dollars 
annually shall arise and be derived, then I will devise and be- 
queath, in such case and as soon as practicable, that one hundred 
dollars or whatever portion of it may be in hand be paid yearly 
toward the stipend of the Rector or Incumbent of the Mountain 
Family Memorial Church of the “Good Shepherd” East Corn- 
wall. . . . 

19th. It is my desire further that as soon as the obligations 
on my personal and real estate have been discharged, including 
the payment of five thousand dollars to the University at Windsor, 

N.S., for which I gave “my note of hand,” then all my real estate 
in Cornwall, Ont., in the Isle of Wight, or, if this should have been 
already sold, according to the instructions herein contained, the 
proceeds of such sale, and the property in the Winthrop Highlands 
near Boston, Mass., U.S., shall be transferred to the Synod of 
the Diocese of Ottawa to be held in trust for the proposed new 
Diocese or suffragan Bishop of Cornwall, Ont., subject to the 
claim of residence, in one or other of my houses, of my dear wife 
during the time of her natural life. 

Also it is my desire that after all existing claims on my estate 
real and personal as hereinabove described shall have been satisfied 
then the accumulation of all rents shall be safely invested to form 
a fund for duly fitting up the house in which Mr. Poole now 
lives, as a suitable residence for the future Bishop of Cornwall . . 

20th. I have made all the above bequests to the suffragan 
bishopric or independent See of Cornwall (which is to be called 
“The Mountain Memorial Bishopric of Cornwall”) in the hope 



168 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1910 

Re 

Mountain. 



that its northern boundary will be the Ottawa River including 
the Island of St. Pierre and all the other islands between the 
Cascades and the Island of Montreal. 

But if the appointment and consecration of such a bishop 
do not take place within twenty-five years after my death, then 
and in such case the properties which had been intended for the 
endowment of the See of Cornwall shall also by transfer become 
the property of Bishop’s College Lennox ville, subject to the 
annual payment of said one hundred dollars to the rector 
or incumbent of said Church of the “Good Shepherd” and other 
bequests herein made chargeable on said property and the privileges 
herein conferred and in trust towards the endowment of a Pro- 
fessorship of Natural Science. . . . 

[The testator then appointed executors and trustees.] 

The first codicil was dated the 6th April, 1903, and contained 
the following provisions, among others: — 

Owing to serious losses and many expenses and disappoint- 
ments since Bishop Dunn of Quebec proposed the formation and 
endowment of the Bishop George Jehoshaphat Mountain Memorial 
Mission Fund — now in process of formation, I am led to reduce, 
as I hereby do reduce, my bequest to said fund to one thousand 
five hundred dollars, payable by my executors as soon as fifteen 
hundred dollars shall have been otherwise contributed towards 
said fund, and this within five years after my death. In default 
of which said sum being otherwise contributed within said time 
said fund shall have no claim on my estate. . . . 

I also direct that the five thousand dollars referred to in my 
. . will . . as set apart for the benefit of the University 
at Windsor, Nova Scotia, be paid by my executors to the 
Alumni Association of King’s College, to be held by them in 
trust for said University, on condition, etc 

The second codicil was dated the 7th August, 1905, and was 
as follows: — 

Know all men by these presents that I, Rev. Canon Mountain, 
D.C.L., D.D., and now of Yarbridge, Brading, Isle of Wight, 
England — do hereby assign and make over to my dear wife — 
Louisa Mira the use of my Bungalow here situated, together with 
that of the adjoining cottage now occupied by Moses Cooper 
(after the time of his decease) to have and to hold the same after 



XXVI.] 



ONTARIO LAW REPORTS. 



169 



my death, and to receive the rents therefrom during the period A. 
of her natural life. 

All be it that this codicil, made on the seventh day of August , Re 

Mountain, 

1905 (nineteen hundred and five) and signed in the presence of 
two witnesses within said Bungalow, does not affect the terms and 
conditions of my last will and testament of which a copy was left 
with my agent R. Smith Esq. the lawyer of Cornwall, Ont. Canada- 

The deed of gift contained in this codicil is free from all mort- 
gage claims and legacy duties. 

The third codicil was dated the 29th May, 1909, and was 
unimportant, except as confirming the will and referring to the 
testator’s property in the Isle of Wight as his “temporary 
residence.” 

The questions for determination submitted by the executors 
were the following: — 

1. What portion, if any, of the estate of the deceased is un- 
disposed of by the said will and codicils thereto, and is to be dis- 
tributed according to the Statute of Distributions ? 

2. What assets or properties of the deceased the said executors 
are entitled to convert into cash for the payment of the debts of 
the deceased, and as to the validity and effect of the directions 
and provisions made in the said will and codicils in restraint of 
sale of the various properties of the deceased. 

3. The fund from which debts secured by mortgages on real 
estate and by transfer of bank stock are to be paid off. 

4. The fund or property from which the executors are to pay 
off the various general legacies contained in the said will and 
codicils and the annuities to his widow and others. 

5. How the executors are to dispose of the income and capital 
of the Hudson Bay shares mentioned in the said will. 

6. What obligations on personal and real estate are referred 
to in clause 19 of the said will and what fund the $5,000 bequeathed 
to the University at Windsor, N.S., is to be paid from. 

7. When and upon the fulfillment of what conditions the prop- 
erty devised to the Synod of the Diocese of Ottawa is to be trans- 
ferred to the said Synod. 

8. What claims on real and personal estate are referred to in 
clause 19 of the will, and how and out of what fund the executors 
are to satisfy the same, and what is meant by the expression in 

12 — XXVI. O.L.R. 



170 



ONTARIO LAW REPORTS. [vol. 



C. A. 
1910 

Re 

Mountain. 



clause 19 “ accumulation of rents,” and how the same are to 
be applied by the executors. 

9. What buildings or erections or repairs the executors should 
undertake pursuant to clauses 11 and 19 of the will and the 
codicil thereto dated the 6th April, 1903. 

10. What houses the widow of the deceased is entitled to oc- 
cupy or receive the rents for. 

11. The general construction of the will and codicils and the 
advice of the Court as to the proper manner of dealing with and 
distributing the estate of the deceased. 



November 9, 1910. The motion was heard by Boyd, C., in 
the Weekly Court at Toronto. 

R. Smith , K.C., for the executors. 

Glyn Osier, for M. Beatrice Lloyd and Rose McCaskell, two 
of the next of kin of the testator. 

J. A. Macintosh, for Salter M. Dickinson and others, also 
next of kin. 

Travers Lewis, K.C., for the Synod of the Diocese of Ottawa. 

D. C. Ross, for Bishop’s College, Lennoxville. 



November 14, 1910. Boyd, C.: — By carefully spelling out 
this complicated will, it appears that the testator provided for 
the payment of his obligations by a double process, and for that 
purpose divided his debts into two classes: (1) what he calls his 
“just debts;” and (2) debts secured by him on land or personalty. 

He first provides for the payment of his “just debts” and 
funeral expenses as soon as possible after his death, and then makes 
the exception that the payment of debts (a) secured on real estate 
or (b) those for which his bank stock has been transferred, should 
be postponed till they have been paid off from the income of his 
estate. 

The distinction is again marked when he transfers all his 
property to his executors; this is so transferred “afterpayment 
of his just debts and funeral expenses,” to be held by them in 
trust. He then, in the 11th paragraph, provides for the transfer 
of lands in trust to the Synod of the Diocese of Ottawa; but 
this is to be read in connection with the 19th paragraph, by which 
it is provided that this transfer is to be made as soon as “the 
obligations of my personal and real estate have been discharged;” 



XXVI.] 



ONTARIO LAW REPORTS. 



171 



and, later in the same paragraph, he says: “ After all existing 
claims on my estate real and personal as hereinabove described 
shall have been satisfied then the accumulation of all rents shall 
be safely invested / ’ etc. 

All these indicate and direct a gathering in and application 
of income from the whole estate, vested already in the executors, 
in order thereout to pay the secured debts, which are, therefore, 
not to be paid in ordinary course out of all available assets forth- 
with, but to be paid from time to time as the income permits 
till all are finally satisfied. 

It is uncertain rather in what category the obligation to Wind- 
sor University is. By the 19th paragraph of the will, it is classed 
with “the obligations on his real and personal estate.” But 
the codicil of the 6th April, 1903, would rather go to indicate a 
payment at one time. No information has been obtained from 
the University as to the nature of the claim which may exist 
against the testator, and I can add nothing to what I have said. 
My judgment is, that the payment of these secured claims is to 
be made out of accruing income of the estate by the executors — 
assuming, that is, that the creditors are willing to wait. But, 
if the claim is enforced by the creditors, I do not see that the 
next of kin have any equity or status to require the executors 
to postpone dealing with respect to the other trusts of the estate, 
for so long as it might have taken to accumulate enough to pay 
all these secured claims in the manner directed by the testator. 
The legal rights of the secured creditors would frustrate the delay 
contemplated by the testator, but cui bonof Surely for the ad- 
vantage of the beneficiaries under the will. The testator’s object 
in accumulating the rents is thereout to have the creditors paid; 
but the object of accumulation ceases when the creditors enforce 
payment out of the general assets in the usual course of adminis- 
tration. I think his intention is clear to exonerate the lands and 
property charged with debts from the payment of the charges by 
the beneficiaries. The general estate is to pay all debts sooner 
or later. 

As soon as the obligations on the real and personal estate are 
satisfied, then the trust arises in respect of the lands. It was 
agreed during the argument that an accumulation of income 
would be required for about five years in order to pay all these se- 



ct A. 

1910 

Re 

Mountain. 

Boyd, C 



172 



ONTARIO LAW REPORTS. 



C. A. 
1910 

Re 

Mountain. 

Boyd, C. 



[VOL. 

cured debts thereout. The lands are then to be conveyed to the 
Synod of the Diocese of Ottawa, to be held in trust for the endow- 
ment of a suffragan bishopric of Cornwall. But, the will pro- 
ceeds, if the accomplishment of the said suffragan bishopric is 
long delayed ... if the appointment and consecration of 
such Bishop do not take place within twenty-five years after my 
death, then the properties intended for the endowment of the 
See of Cornwall shall by transfer become the property of Bishop’s 
College, Lennoxville. 

The will was made on the 25th June, 1902, and the last codicil 
confirming his will was made on the 29th May, 1909, and the 
testator died, in the Isle of Wight, on the 1st May, 1910. The 
appointment of any Bishop for a Diocese of Cornwall has not 
yet taken place — though some steps have been taken towards the 
establishment of a coadjutor bishopric in that locality. But the 
matter has in no sense reached that point of completion required 
by the testator. The question is, whether the trust to convey 
by the executors of the testator is to remain in abeyance for twenty- 
five years from his death or for such lesser period as may elapse 
before a coadjutor or suffragan Bishop has been appointed and 
consecrated for the new See of Cornwall, or is it a void bequest 
by reason of infringing the rules against remoteness? Even if 
the conveyance to the Synod was not to be made till the Bishop 
was appointed, it may be persuasively argued that the testator 
was aware of the condition of his estate, and contemplated that 
some five years would elapse from his death before the lands were 
to be taken out of the hands of the executors — they holding them 
under the trust to satisfy, first, the secured creditors before the 
claim of the Synod arose. Thus, in the view of the testator, five 
years would be occupied in clearing the real estate, and only an 
interval of twenty years would be the period of suspense as to 
whether or not a Bishop should be appointed. That length of 
time would not be objectionable in point of remoteness. 



But I prefer that reading of the will which would call for the 
conveyance of the lands to the Synod forthwith upon the satis- 
faction of the secured debts — by that body to be held in trust 
expectant upon the episcopal appointment for the period of 
twenty-five years from the testator’s death — with provision for 
the transfer of the lands by the Synod to the Lennoxville College, 



XXVI.] 



ONTARIO LAW REPORTS. 



173 



if no Bishop had been duly appointed before the end of the twenty- c - A - 
five years. 

The language of the testator permits of this construction, Mou ^ AIN 
and the Court will be slow to seek to frustrate his general charitable 

Boyd, C. 

purpose. 

All the real and personal estate is vested in the executors to 
hold in trust ... for the purpose, as to the lands mentioned, 
of being “ legally conveyed to the Synod of the Diocese of Ottawa 
to be held in trust by said Synod for an endowment of the bishopric 
of Cornwall whenever the Bishop of Cornwall is being appointed” 

(sic ) . 

Again, in paragraph 20, he adverts to this trust conferred by 
the earlier clause on the Synod of Ottawa, in this way: “If the 
appointment ... of such a Bishop do not take place within 
twenty-five years after my death, then and in such case the proper- 
ties which had been intended for the endowment of the See of Corn- 
wall shall also by transfer become the property of Bishop’s College, 

Lennox ville.” That is, as I read it, the then trustees for the 
Synod shall, at the end of the twenty-five years (if no Bishop is 
appointed), transfer what they hold to the trustees of the college 
“in trust towards the endowment of a Professorship of Natural 
Science.” 

In brief, after payment of the secured debts, the real estate 
held in trust is to be conveyed in fee simple to the Synod, subject 
to be divested if a Bishop is not appointed in twenty-five years, in 
favour of the college. 

Here is found an immediate gift for charitable uses, delayed 
as to the actual conveyance till the secured debts are paid, and, 
therefore, vested at the death and effective in law, though the 
particular application of the gift may be in suspense for twenty- 
five years or may never take effect at all — in which contingency 
there is a valid transfer to another charity at the end of the twenty- 
five years. Chamberlayne v. Brockett (1872), L.R. 8 Ch. 206, 
lays down the general principle, and there is a particular applica- 
tion of it in In re Swain, [1905] 1 Ch. 669, which is much in point 
as to the scheme of this will. 

The disposition of the lands to the first charity (the Synod) 
being valid, the provision for the transfer in certain events to the 
second charity (the college) is also a valid charitable bequest: 



174 

C. A. 
1910 

Re 

Mountain. 
Boyd, C. 



ONTARIO LAW REPORTS. ' [vol. 

Christ’s Hospital v. Grainger (1848-9), 16 Sim. 83, affirmed 1 
Macn. & G. 460. 

The testator had sixty Hudson Bay shares of considerable 
value, which are held by the executors in trust for the payment of 
debts as aforesaid. I have considerable doubt as to their future 
disposal. They are mentioned specifically in connection with the 
endowment of the new bishopric and the lands intended therefor. 
The will reads (paragraph 11): “If the yearly income . . . 

together with any other official income from whatever source, be 
insufficient to produce a salary of $2,000 a year for a suffragan 
Bishop . . . then, in such case, the income of my Hudson 

Bay shares . . . or such part of the said income . . . 

as may be requisite shall be applied towards the same object." 
Paragraph 12: “But if it be unnecessary . . . so to apply 

the income of said 60 Hudson Bay shares . . . then . . . 

I hereby bequeath these . . . shares to the University of 

Bishop's College . . . and constitute said corporation my 

residuary legatee, so far as said shares are concerned, upon the 
following trusts and conditions" ( i.e ., to found a Mission 
Fellowship, etc.). 

I incline to think that the shares, after debts satisfied, are to 
be held by the Synod of the Diocese to accumulate the income 
for the purposes of the expected endowment of the new bishopric; 
and, if and when that is established, within the twenty-five years, 
to apply the accumulated as well as the yearly accruing income 
in payment of the salary named. If there is a surplus, or the 
bishopric is not created within the period, then that surplus or 
the shares themselves are to be transferred to Bishop’s College. 
That is to say, the final beneficiary takes in subordination to the 
prior beneficiary, and only so much as can be called “residue" 
after the just claims for the endowment are satisfied. This con- 
struction is warranted, I think, by the exceptional rule which 
obtains in favour of charities, viz., that it is preferable to give 
effect to the general intention of the testator, though the detail 
be incomplete, than to declare an intestacy. The testator means 
to allocate all these Hudson Bay shares (income and capital) 
to one or other of the named charities: In re White, [1893] 2 Ch. 41. 

The restraint upon the sale of the Isle of Wight land till a tun- 
nel is made between the Isle and the mainland, if such should be 



XXVI.] 



ONTARIO LAW REPORTS. 



175 



made within the lifetime of any of the executors or twenty-one 
years thereafter, would appear to be an illegal provision under 
In re Rosher (1884), 26 Ch.D. 801, followed and approved of in 
Blackburn v. McCollum (1903), 33 S.C.R. 65. 

These were all the points before me, and counsel agreed that 
the disposal of these would sufficiently clear the way for proceeding 
with the administration of the estate; and I answer them as above 
indicated. 

Costs out of the estate. 



C. A. 
1910 

Re 

Mountain. 

Boyd, C. 



Salter M. Dickinson and others, some of the next of kin of 
the deceased, appealed (by leave) directly to the Court of Appeal 
from the judgment of Boyd, C. 



November 22, 1911. The appeal was heard by Moss, C.J.O., 
Garrow, Maclaren, Meredith, and Magee, JJ.A. 

J. A. Macintosh , for the appellants. The learned Chancellor 
should have held that, if the executors were obliged to pay the 
debts, or any of them, secured on real or personal estate, otherwise 
than out of income, then to the extent that such debts are paid 
otherwise than out of income, the amount so paid should be re- 
stored to the estate out of accumulation of subsequent income. 
The devise and bequest to the Synod of the Diocese of Ottawa is 
made upon a condition or conditions which need not be performed 
within the limits allowed by the rule against perpetuities, and is 
therefore void: Cherry v. Mott (1835), 1 My. & Cr. 123; Chamber- 
lay ne v. Brockett, L.R. 8 Ch. 206, at p. 212; In re Lord Stratheden 
and Campbell, [1894] 3 Ch. 265; In re Bewick, [1911] 1 Ch. 116. 
If the devise and bequest to the Synod of the Diocese of Ottawa 
is void, the devise and bequest to the University of Bishop’s 
College, Lennoxville, which is dependent on the validity of the 
devise and bequest to the Synod, is also void, and the property 
covered by it becomes part of the undisposed of estate: Robinson 
v. Hardcastle (1786), 2 Bro. C.C. 22; Brudenell v. Elwes (1801), 

1 East 442; Beard v. Westcott (1813), 5 Taunt. 393; Monypenny 
v. Bering (1852), 2 D.M.&G. 145; Routledge v. Dorril (1794), 

2 Ves. Jr. 356. 

Glyn Osier, for M. Beatrice Lloyd and Rose McCaskell, next of 
kin, in the same interest as the appellants. The learned Chan- 
cellor’s order declares that in case the executors are obliged to 



176 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1911 

Re 

Mountain. 



pay any portion of the secured debts before receiving sufficient 
income out of which to pay them, they are to pay them out of the 
undisposed of corpus of the estate, which is not to be replaced 
from subsequent income. This declaration is contrary to the 
express intention of the will, namely, that when the time for dis- 
tribution of the corpus should arrive the corpus should be intact, 
the debts and charges having been discharged out of income. 
The testator’s general intention was to postpone payment of the 
substantial legacies and bequests until the discharge of his debts 
out of income. If any creditors whose debts are due refuse to 
wait, the beneficiaries should not thereby become entitled to re- 
ceive their legacies before the debts have been paid or provided 
for out of income. In case the executors are required to pay 
debts of an amount exceeding the income in hand, at the time 
payment is demanded, their duty is either to raise the necessary 
fund by charging upon the estate or to replace the corpus tem- 
porarily used to discharge the debts. If subsequent income can- 
not be used to replace moneys provided to meet a deficiency, then, 
the fund indicated for payment having partly failed, the devisee 
must take the real estate subject to the unpaid portion of the charg- 
es and incumbrances against it: Wills Act, R.S.O. 1897, ch. 128, 
sec. 37; Rodhouse v. Mold (1866), 35 L.J. Ch. 67. I adopt the 
argument of counsel for the appellants that the devises and be- 
quests to the Synod and to Bishop’s College are void under the 
rule against perpetuities under the authorities cited by him. 

Travers Lewis, K.C., and J . W. Bain, K.C., for the Synod of 
the Diocese of Ottawa. The gift to the Synod is a vested gift, 
to which the rule against perpetuities cannot be applied: Chamber- 
lay ne v. Brockett, L.R. 8 Ch. 206, at p. 210; In re Swain, [1905] 
1 Ch. 669. The gift being to a charity, the gift over is also good, 
as the rule is not applied to such a case: Christ’s Hospital v. 
Grainger, 16 Sim. 83, 1 Macn. & G. 460; Wallis v. Solicitor-General 
for New Zealand, [1903] A.C. 173, at p. 186; Theobald on Wills, 
7th ed., p. 367; Re Gyde (1898), 79 L.T.R. 261; Attorney- 
General v. Bishop of Chester (1785), 1 Bro. C.C. 444. In 
case the executors are obliged to pay any of the secured debts 
before sufficient income shall be received by them, they are en- 
titled to pay the same out of the undisposed of corpus of the 
estate, and in such event the portion of the corpus so expended 




XXVI.] 



ONTARIO LAW REPORTS. 



177 



is not to be replaced from subsequent income : Metcalfe v. Hutchin - c - A - 

son (1875), 1 Ch.D. 591, at p. 594; Theobald on. Wills, 7th ed., 
pp. 834 and 836; Adamson v. Armitage (1815), 19 Ves. 416; Page Mou ^® 
v. Leapingwell (1812), 18 Yes. 463; Haig v. Swiney (1823), 1 Sim. 

& Stu. 487; In re L’Herminier, [1894] 1 Ch. 675; Wharton v. 
Masterman, [1895] A.C. 186; Mannox v. Greener (1872), L.R. 14 
Eq. 456, 462; Morrow v. Jenkins (1884), 6 O.R. 693. The re- 
straint upon the sale of the property in the Isle of Wight and of 
the properties in Cornwall and the Hudson Bay shares is an 
illegal restraint: Blackburn v. McCollum, 33 S.C.R. 65. The 
widow is not entitled to the use of the testator’s house in 
Cornwall if she accepts the devise to her of the testator’s bungalow 
in the Isle of Wight and the cottage adjoining it. The Synod 
should be paid their costs as between solicitor and client: Re 
Fleming (1886), 11 P.R. 272, 285, and cases there cited. 

D. C. Ross, for Bishop’s College, Lennoxville. The Hudson 
Bay shares should be transferred to the college after payment of 
the debts and charges mentioned in the third paragraph of the 
judgment, or be held in trust by the trustees of the will and the 
income paid to the college until such time as the suffragan Bishop 
of Cornwall is appointed, and it is ascertained that his salary 
requires to be augmented from the income of these shares. If the 
devise and bequest to the Synod of the Diocese of Ottawa be held 
void for remoteness, the same became vested in or was transferred 
to the college, which is a charity in esse ; or, there being a general 
charitable intention, on failure of one mode, the other indicated 
should take effect in favour of the College. See Taylor’s Equity, 
pp. 176, 177; Going v. Hanlon (1869), 4 Ir. R.C.L. 144. 

R. Smith, K.C., for the executors, submitted his clients’ rights 
to the Court. 

Macintosh, in reply. In the Christ’s Hospital case, cited by 
the respondents, the first bequest was a valid one. But I deny 
that if the devise to the first charity is invalid, and the second 
offends against perpetuities, it is valid because it follows another. 

See In re Bowen, [1893] 2 Ch. 491; Theobald on Wills, 7th ed., 
p. 373. On the question of the validity of the gift, see Worthing 
Corporation v. Heather, [1906] 2 Ch. 532, at p. 538. 

April 15. Moss, C. J.O. : — This is an appeal by certain of the 
next of kin of the testator, the Rev. Jacob Jehoshaphat Salter 



178 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Re 

Mountain. 

Moss, C.J.O. 



Mountain, D.D., from the judgment pronounced by the Chancellor 
of Ontario upon two of several questions raised by the executors 
and executrix of the will under Con. Rule 938, as enacted by 
Con. Rule 1269. The questions were: whether, if the executors 
were obliged to pay debts or any part of debts secured on the 
testator’s real or personal estate otherwise than out of income, 
the amount so paid should be restored to the estate out of subse- 
quently accumulated income; and whether or not the devise and 
bequest contained in the will to the Synod of the Diocese of Ot- 
tawa is void as offending the rule against perpetuities. 

The learned Chancellor determined both these questions ad- 
versely to the contention of the appellants, who are supported in 
the appeal by others in the same interest. Other questions were 
discussed by counsel for the Synod of the Diocese of Ottawa 
during the argument; but, if they are at all proper to be disposed 
of upon a proceeding of this kind, they seem not to be ripe for 
determination at present. 



The main question is, of course, whether the devises and be- 
quests to the Synod are void under the rule against perpetuities. 

The will, which, with three codicils, deals with and purports 
fully to dispose of the testator’s estate, is a very long and intricate 
instrument, containing many complicated and involved provisions 
and directions, due to some extent, no doubt, to the testator’s 
evident fondness for and tendency to minute detail and his desire 
to leave nothing unprovided for in the final disposition of his 
estate. And it is apparent that he must have felt satisfied that 
he had effectively disposed of all he possessed, for there is no 
residuary clause. 

His whole estate, real and personal, is said to be of the value 
of about $99,000. There were debts which he appears to have 
divided into two classes, and which it was his desire should be 
treated differently or at least regarded in a different way by his 
executors in the administration of his estate : (a) ordinary current 
debts, which he calls his “just debts;” and (b) debts secured by 
him on lands or personalty, among which he seems to have in- 
cluded a liability of $5,000 to the University at Windsor, Nova 
Scotia, for which, he says, he gave his “note of hand.” , 

He desired the first class, together with his funeral expenses, 
to be paid as soon after his death as possible. His intention with 



XXVI.] 



ONTARIO LAW REPORTS. 



179 



regard to the other class was to postpone payment so far as to 
enable them to be paid off from the income of his estate. He 
could not, of course, control the action of the creditors, in case 
they were not willing to wait after their claims became payable. 
Beyond this, he gives no specific directions to his executors with 
regard to the payment of these debts, except what is to be gathered 
by inference from the 19th paragraph of the will, and the direction 
in the first codicil as to the payment by the executors of the $5,000 
to the Alumni Association of King’s College, instead of directly 
to the University of Windsor. This latter direction is quite 
consistent with the payment of the amount in one sum out of the 
general estate, instead of out of income. By the 11th paragraph 
of the will, the. testator gives directions for the conveyance of the 
properties there mentioned, and the proceeds of any that may 
have been sold, to the Synod of the Diocese of Ottawa, to be held 
by it in trust for the endowment of the bishopric of Cornwall, 
only delayed, if at all, by virtue of what is provided in the 19th 
paragraph of the will. But I do not think that these provisions 
were intended to affect or do affect the vesting in the Synod of 
Ottawa of an immediate estate or interest for the purposes 
designated in the 11th paragraph. The two paragraphs must 
be read together, and, so read, they are found to contain, as the 
learned Chancellor expresses it, “an immediate gift for charitable 
uses, delayed as to the actual conveyance till the secured debts 
are paid, and, therefore, vested at his (the testator’s) death.” 

Here the gift to the Synod for the charitable purposes ex- 
pressed is not conditional upon the payment of the debts out of 
the income. The gift takes immediate effect, whichever way 
the debts may be paid. In the recent case of In re Bewick, [1911] 
1 Ch. 116, much relied upon by the appellants, there was no gift 
to the children living and the issue of any that might have died nor 
any vesting in them of any beneficial interest until all the testator’s 
real estate should be clear of all charges thereon — a wholly un- 
certain event which might operate to postpone the period of vesting 
beyond that prescribed by the rule against perpetuities. I agree 
with the construction which the learned Chancellor has placed 
upon this will as regards this branch of the case. 

As to the application of income to the exoneration of the 
general estate, to the extent, if any, to which it may be called upon 



C. A. 
1912 

Re 

Mountain. 

Moss, C.J.O. 



180 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Re 

Mountain. 

Moss, C.J.O. 



[VOL. 

to answer the secured debts, I am, with deference, unable to per- 
ceive any reason why that should not be the case. It is very 
apparent that, while the testator was anxious, if possible, to free 
the incumbered estates by the application of income, he had no 
intention that they should be freed at the expense of the general 
estate; and I think the judgment should be varied in this respect. 

We were asked by counsel for the Synod to pronounce upon a 
number of other points. One was with regard to a further declara- 
tion as to conditions which he submitted were in restraint of sale 
of the testator’s Cornwall property and Hudson Bay shares 
This may or may not depend upon circumstances, and could 
properly arise only in administration proceedings. So with 
regard to the alleged obligation of the testator’s widow to elect 
between the gifts to her of a life estate in the testator’s Cornwall 
house and one in the Isle of Wight. The facts are not sufficiently 
developed to enable any proper conclusion to be arrived at on this 
question. Then, as to the claim that the Synod should be paid 
its costs as between solicitor and client, the rule does not extend 
in general beyond the applying trustee or executor, and we could 
not interfere with the order as it now stands in this respect. 

Except as indicated, I would affirm the judgment appealed 
from, the directions of which appear quite sufficient to enable all 
the matters dealt with by the learned Chancellor to be properly 
worked out. 

As to costs, the appellants have failed as to the substantial 
part of their appeal, and should pay the costs of the respondents 
who are adverse in interest to them. The executors’ costs, as 
between solicitor and client, may be paid out of the estate. 

Meredith, J.A. : — This matter seems to me to be within 
quite a narrow compass ; and easy to be determined if approached 
in the right way. 

Our duty is not to endeavour to wreck this will upon the 
shoals of technicality, or upon any rock of inexorable rule of law, 
but rather to guide it through such obstacles, and to give effect 
to the testator’s intentions, expressed in it, if, by any lawful 
means, that can be done, and, for that purpose, to take a compre- 
hensive view of the will, not to search for, and stumble at, minute 
seeming contradictions or uncertainties; and that duty can, I 
think, be accomplished without any sort of serious difficulty. 



XXVI.] 



ONTARIO LAW REPORTS. 



181 



I am unable to perceive any substantial reason why the 
gift to the Synod may not be considered a vested gift, to which 
the rule against perpetuities cannot be applied; and once vested 
the estate may last indefinitely without offending the rule; and, 
the gift being a gift to a charity, and the gift over to another 
charity, the gift over is also good, as the rule is not applied to such 
a case: see In re Tyler , [1891] 3 Ch. 252. In this respect this 
matter comes within the authority of Chamberlayne v. Brockett, 
L.R. 8 Ch. 206, and not within that of In re Lord Stratheden and 
Campbell, [1894] 3 Ch. 265, in which the gift was made upon a con- 
dition that might never happen; in this case the gift was vested, 
but to be divested in a certain event. The intention was not to 
give only in the event of the creation of the new see; that would 
be to frustrate, rather than to further, the testator’s object, an 
object which was dear to his heart. He knew that that could 
hardly be accomplished without the means which he was provid- 
ing, and possibly might not be, even with them; and so the means 
were given presently, but to be withdrawn if the bishopric were 
not an accomplished fact within the twenty-five years. The 
parenthetical restriction, contained in the 12th item of the will, 
may, I think, be considered an attempt to restrain alienation; 
whether valid or not is immaterial upon this the main question 
in the case. 

The pro vision % for the payment of debts out of the income 
does not aid the appellants in this respect, nor would it, if it de- 
layed the beneficiaries having the benefit of,, the gifts to them, 
beyond the perpetuities’ period; for a trustee in such a case holds 
in trust for the beneficiary, subject to the payment of the debts: 
Bacon v. Proctor (1822), T. & R. 31. 

If creditors will not wait, or if the beneficiaries are willing 
to pay off all charges against their properties, I cannot understand 
why the simple method adopted in the case of Bacon v. Proctor 
should not be followed; or, in any case, why the money to pay off 
pressing creditors may not be raised upon the estate in such a 
manner as will put the new creditors in precisely the same position 
as the old creditors, and so leave this matter, substantially, pre- 
cisely as the testator left it by his will: and, I think, this should 
be done. But, whatever course may be adopted, the burden 



C. A. 
1912 

Re 

Mountain. 

Meredith, J.A. 



182 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Re 

Mountain. 

Meredith, J.A. 



[VOL. 

ought to be made to fall, in all respects, just as it would under 
the will, if possible, and, if not possible in all respects, then as nearly 
so as possible. 

Questions of restraint on alienation do not seem to me to be 
proper subjects of an application such as this. An expression 
of opinion upon such an application would be of no useful binding 
effect; upon proceedings between vendor and purchaser such a 
question would properly arise and a judicial opinion be effectual. 
An opinion now expressed would be especially out of place, in my 
opinion, in regard to the land in the Isle of Wight: I, therefore, 
refrain from expressing any opinion upon these questions. 

The question whether the widow is entitled to Pinehurst 
House, as well as to the Bungalow, depends entirely upon the 
question of fact, whether, at the time of the testator’s death, 
Pinehurst House was his and was also the home of his wife and 
himself. Each gift is for life; there is no restriction upon that of 
the Bungalow, but in regard to Pinehurst House his will is: “She 
is also to have the use, rent free, during the time of her natural 
life, of this ‘ Pinehurst House/ furnished, or of whichever house of 
mine may be our home at time of my decease.” So that, 
though the widow certainly takes the Bungalow, she loses Pine- 
hurst House if at the time of the testator’s death the Bungalow 
were “our home,” for it was unquestionably a “house of mine.” 
In the codicil of the 29th May, 1909, the last codicil, the testator 
refers to his property in the Isle of Wight as his “temporary 
residence.” 

There is no sufficient ground upon which the disposition of 
the costs of the application can be disturbed; but the appellants 
ought to pay the general costs of this appeal, the substantial 
question being the validity of the gifts to the charities. 

G arrow, M acl aren, and Magee, JJ.A., concurred. 



Judgment below varied. 



XXVI.] 



ONTARIO LAW REPORTS. 



183 



[IN THE COURT OF APPEAL.] 

Merchants Bank of Canada v. Thompson. 

Promissory Note — Indorsement to Bank by Customer before Maturity — 
Purpose of — Collection or Collateral Security — Lien of Bank for 
Amount Oioing by Customer — Fresh Indebtedness when Note Overdue 
— Failure of Consideration between Original Parties — Purchase of 
Share in Partnership — Part Failure of Consideration. 

The judgment of a Divisional Court, 23 O.L.R. 502, was reversed and the 
judgment of Boyd, C. restored; Maglaren, J.A., dissenting. 

Per Moss, C.J.O. : — Even if the promissory note sued on was indorsed to 
the plaintiffs merely for collection, and not as collateral security, the 
plaintiffs were still entitled to the judgment awarded to them by Boyd, 
C. As indorsees for collection, they were entitled to a lien on the 
note for debts that were then presently payable and from time to time 
thereafter becoming payable. When the note was received by the 
plaintiffs, it was a note for good consideration, not overdue. The de- 
fendants became parties to the note as sureties for L. upon a trans- 
action between him and F. for the acquisition by L. of a half share in 
the business of F. and the formation of a partnership between them. 
The partnership was in fact created; and its subsequent termination 
would not bring about a total failure of consideration so as to affect 
the validity of the note in the hands of either F. or the plaintiffs. 
Upon taking the partnership accounts, L. might be able to shew himself 
entitled to a return of part of the premium; but it was for the defend- 
ants to shew this, if they wished to avail themselves of the defence 
of part failure of consideration; and they had not shewn it. 

Per Meredith, J.A. : — The proper conclusion upon the facts is, that the 
note was taken and always held by the plaintiffs as security for the re- 
payment of all that might from time to time be owing by F. to the 
plaintiffs. And, that being so, the note was good, in the< plaintiffs’ 
hands, against the makers of it, for the amount of the indebtedness of 
F. to the plaintiffs; the fact that at some times there was nothing 
due from F. to the plaintiffs would not cut out that right or deprive 
the plaintiffs of the position of a holder in due course; there would 
not be by implication a new transfer of the note as security for each 
separate indebtedness or advance; there would be but the one trans- 
action, to which all changes in the account between F. and the plain- 
tiffs would be referable; everything would relate back to the one transfer 
made while the note was current; although it was competent for F. 
to take up the note at any time when there was no obligation on his 
part to the plaintiffs. 

Atwood v. Crowdie (1816), 1 Stark. 483, followed. 

Per Maclaren, J.A. : — The note was left with the plaintiffs “for what it 
was worth,” without any special pledging or hypothecation; and the 
right which the plaintiffs had under their banker’s lien was the right 
to retain the note for any debt due to them; they had no right to 
retain it for any liability not yet due or payable. The legal position of 
the plaintiffs was the same as though they had returned the note to 
F. when there was nothing owing by him, and he had redelivered it to 
them when he again became indebted to them, it being then overdue, 
and so taken subject to all the equities between the makers and F. ; 
and there was such a failure of consideration as between F. and L. as 
would prevent the plaintiffs from recovering. 

Atwood v. Crowdie, supra, explained. 

An appeal by the plaintiffs from the judgment of a Divisional 
Court, 23 O.L.R. 502. 



C. A. 
1912 

April 15 



184 

C. A. 
1912 

Merchants 
Bank of 
Canada 

v. 

Thompson. 



ONTARIO LAW REPORTS. [vol. 

January 16 and 17. The appeal was heard by Moss, C.J.O., 
Garrow, Maclaren, Meredith, and Magee, JJ.A. 

J. F. Orde, K.C., for the plaintiffs. There^was not a total 
failure of consideration. Living got what he agreed to pay’ for: 
Lindley on Partnership, 7th ed., p. 626. The failure of con- 
sideration (if any) was at most but partial, entitling Living to 
a partial return of his premium: Chalmers on Bills of Exchange, 
7th ed., p. 108; Kilroy v. Simkins (1876), 26 C.P. 281. The 
note was, prior to its maturity, pledged to the bank as collateral 
security for advances theretofore made and thereafter to be 
made to Fox. Consequently, notwithstanding that the loans to 
Fox were from time to time paid off, the plaintiff s’ right to the 
security would attach from the date of the pledge, September, 
1907; Atwood v. Crowdie (1816), 1 Stark. 483. But the plaintiffs’ 
right to recover does not depend upon an express pledging of 
the note. The plaintiffs, in any event, held the note for collec- 
tion, and were consequently entitled to exercise their banker’s 
lien, which has the effect of creating a pledge without any con- 
scious pledging: Paget on Banking, 2nd ed., pp. 297, 298; Grant 
on Banking, 6th ed., pp. 301 and 305; Hart on Banking, 2nd ed., 
p. 744; Brandao v. Barnett (1846), 12 Cl. & F. 787; and by 
virtue of their lien they became holders for value and are en- 
titled to recover to the extent of the lien: Bills of Exchange 
Act, sec. 54; Maclaren on Bills, 4th ed., pp. 174, 175; Falcon- 
bridge on Banking, pp. 449 et seq.; Chalmers on Bills of Exchange, 
7th ed., pp. 93 et seq. No state of facts has been shewn by the 
defendants which constituted an “ equity attaching to the note” 
or rendered Fox’s title defective within the meaning of sec. 70 
of the Bills of Exchange Act: Oulds v. Harrison (1854), 10 Ex. 
572; In re Overend Gurney <& Co., Ex p. Swan (1868), L.R. 6 
Eq. 344. The cases of Holmes v. Kidd (1858), 3 H. & N. 891, 
and Ching v. Jeffery (1885), 12 A.R. 432, are clearly distinguish- 
able from the present case. What took place in both these cases 
amounted in effect to payment or part payment, and the amount 
was in each case liquidated and ascertained. The appellants also 
rely upon the reasons given by the Chancellor and Mr. Justice 
Britton. 

Travers Lewis, K.C., and J. W. Bain, K.C., for the defen- 
dants. The note represented the purchase-price of a half share 



XXVI.] 



ONTARIO LAW REPORTS. 



185 



in Fox’s manufacturing agencies, which half share Living never 
got; and, consequently, the consideration for the note wholly 
failed. Section 54 of the Bills of Exchange Act, relied upon by 
the learned trial Judge, we submit, does not extend to the case 
of a dishonoured note: Hart on Banking, 2nd ed., p. 480; Giles 
v. Perkins (1807), 9 East 12; Thompson v. Giles (1824), 2 B. 
& C. 422; Dawson v. Isle , [1906] 1 Ch. 633, 637. The evidence 
shews that the note was deposited for collection only. There 
is no doubt that the defendants were sureties; and the bank 
manager, after the note matured, must have known that such 
was the case. The note was repledged after maturity, and the 
bank had no property in it, but only a lien at most, under sec. 54 
of the Bills of Exchange Act. As soon as the indebtedness of 
Fox was wiped out, the lien was discharged; and, when a new 
lien accrued, it would be subject to the intervening equities: 
Chalmers on Bills of Exchange, 6th ed., p. 120. Sections 54 and 
70 of the Bills of Exchange Act ought not to be read together : 
Falconbridge on Banking and Bills of Exchange, pp. 477, 478; 
Ching v. Jeffery, 12 A.R. 432, especially at pp. 434, 436; Polak 
v. Everett (1876), 1 Q.B.D. 669, per Blackburn, J., at p. 674; 
Britton v. Fisher (1867), 26 U.C.R. 338, at pp. 339, 340. The 
evidence shews that there was a binding agreement by Fox to 
give time to Living; and the learned trial Judge erred, we sub- 
mit, in thinking that there was no sufficient variation to alter 
the position of the parties: Canada Permanent Loan and Savings 
Co. v. Ball (1899), 30 O.R. 557, and particularly at pp. 568, 572, 
573, and the authorities there collected; Bonar v. Macdonald 
(1850), 3 H.L.C. 226, 238. Making an agreement with the 
principal debtor for 8 per cent, interest on the overdue note 
is a giving of time sufficient to discharge the sureties: Blake v. 
White (1835), 1 Y. & C. (Ex.) 420, 426; DeColyar on Guarantees, 
3rd ed., pp. 422, 424; Brandt on Suretyship (1905), vol. 1, secs. 
389, 394; Lime Rock Bank v. Mallett (1856), 42 Me. 349, 358; 
Rowlatt on Suretyship (1899), p. 245. On the point of banker’s 
lien, see Lloyd v. Davis (1824), 3 L.J.O.S.K.B. 38; Falconbridge 
on Banking, p. 460, and cases there cited. The respondents also 
rely on the reasons given by the Chief Justice of the King’s Bench. 

Orde, in reply. 

April 15. Moss, C.J.O.: — This is an appeal by the plaintiffs 



C. A 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 



13 — XXVI. O.L.R. 



186 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 
Moss, C.J.O. 



[VOL. 

from a judgment of a Divisional Court reversing (Britton, J., 
dissenting) a judgment of the Chancellor of Ontario at the trial 
without a jury. 

The case is reported in 23 O.L.R. 502, where the facts are 
fully stated in the judgment of the Chief Justice of the King’s 
Bench. 

The plaintiffs sue as the holders of a promissory note for 
$2,000 made by one A. H. Living and the defendants in favour 
of one C. H. Fox, and by him indorsed to the plaintiffs’ order. 
The note is in form joint and several. The action was brought 
against the two defendants alone, and no steps were taken by 
them to bring or cause the plaintiffs to bring Living and Fox 
into the action. 

They were, of course, not bound to do so unless they con- 
sidered it material to their defence; but, in one aspect of the 
case, it might have been to their advantage to have had them 
before the Court. 

The defences relied upon, as shewn by the record upon which 
the parties went to trial, as well as those afterwards permitted 
to be set up, are set forth on p. 508 of the report. 

As regards the answers to the action alleged in the first para- 
graph of the original defence and repeated in substance in two 
paragraphs of the further defences, viz., an agreement for exten- 
sion of time and neglect to give notice of dishonour to the de- 
fendants, there is no difference of opinion between the trial Judge 
and the Divisional Court. These defences failed for lack of 
proof that the plaintiffs had notice that the defendants were 
' sureties for Living. 

The other defences, viz., that the note was made without 
consideration and was indorsed to the plaintiffs without con- 
sideration and after maturity; that the consideration for the 
note as between Fox and Living failed, and that at the time of 
the commencement of the action the plaintiffs’ title was no higher 
than Fox’s, and the note was held subject to the existing equities 
between him and Living, are those upon which the differences 
of opinion have arisen. It is now beyond question, upon the 
evidence, that the defendants became parties to the note as 
sureties for Living upon a transaction between him and Fox 
for the acquisition by the former of a half share or interest in 



XXVI.] 



ONTARIO LAW REPORTS. 



187 



the business of manufacturers’ agent carried on by Fox in the 
city of Vancouver, and the formation of a partnership between 
them in the business. The nature of the transaction is to be 
gathered from the evidence of these parties and the memorandum 
of agreement signed by them. In effect, it was the not unusual 
transaction of a person purchasing his way into an established 
business, paying a bonus or premium to the owner, and entering 
into partnership with him, upon terms arranged between them. 

The bonus or premium to be paid was $2,000; but, as Living 
was unable to provide the money, and Fox was willing to accept 
the promissory note of the defendants, Living prevailed upon 
them to join him in the note in question. It is dated the 1st 
July, 1907, payable three months after date, and therefore fell 
due and payable on the 4th October, 1907. It was received by 
the plaintiffs from Fox on the 12th September, 1907, and has 
been in their possession ever since. 

At the time when the note was received, the plaintiffs had 
under discount a note for $500 made by Fox dated the 4th Sep- 
tember, payable in thirty days, but beyond this he was not in- 
debted to the plaintiffs. 

There is upon the testimony a far from satisfactory account 
of the terms or conditions under which the note was left with the 
plaintiffs. Fox was positive that it was left for collateral and 
collection. The plaintiffs’ manager would not use the term 
“collateral.” He said it was left “for what it was worth;” and 
the records shew that it was entered in the collection and not 
in the collateral register. The learned Chancellor found as a 
fact that it was left as collateral security and also for collection; 
while, in the Divisional Court, the learned Chief Justice said 
that, notwithstanding Fox’s evidence, the impression made upon 
him was that the note was indorsed to the plaintiffs merely for 
collection, and not as collateral. The conclusion I have reached 
upon the question of consideration renders it unnecessary finally 
to decide between these conflicting views; but, on the whole, 
I incline to the latter. Even so, in my view, it still leaves the 
plaintiffs entitled to the judgment awarded to them by the Chan- 
cellor. 

As indorsees for collection of the note, they were entitled to 
a lien on it for debts that were then presently payable and from 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 

Moss, C.J.O. 



188 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 

Moss, O.J.O. 



time to time thereafter becoming payable. The claim now made 
is in respect of an indebtedness of Fox which became payable 
from and after the 24th November, 1908. Prior to that date, 
there was a period> in which Fox was free from direct indebted- 
ness, although there were some outstanding notes or drafts under 
discount; a time during which, according to the plaintiffs’ mana- 
ger, Fox was at liberty to take the note out of the plaintiffs’ 
possession had he chosen. But Fox did not take it away, and 
it remained with the plaintiffs until the debts now due and pay- 
able had accrued. And, unless something had occurred between 
Fox and Living prior to the 24th November which furnished the 
latter with a defence to an action on the note, the plaintiffs are 
entitled as holders to a lien for the amount of Fox’s indebtedness 
to them. 



The defence set up is want of consideration and total failure 
of consideration. Upon the evidence, it seems to me to be plain 
that there was good consideration for the note when it was given. 
Living obtained an interest in Fox’s agency business which he 
then had and which he might thereafter acquire, and became 
a partner on equal terms with Fox. He was and acted as a 
partner for at least fifteen months, during which time he says 
he earned or become entitled to several thousand dollars as 
profits, and actually received about $1,000 for his own use. He 
was known to at least some of the customers or persons with 
whom or on whose behalf he and Fox executed commissions, and 
drafts in the firm name had been drawn upon some of them. 
Upon the facts, it would be impossible for Fox to deny that 
Living was a co-partner or legally to refuse him his rights as 
such. Neither could Living be heard to say, as against persons 
dealing with the firm, that he was not a partner. When, there- 
fore, the note was received by the plaintiffs, it was a note for 
good consideration, not overdue. 

But then it is said that a failure of consideration accrued by 
reason of what took place between Fox and Living in July, 1908, 
when Living left the firm’s place of business. What occurred 
at that time could have no greater effect than a dissolution of 
the partnership. If, as Living seems to think, it was a wrongful 
expulsion, that could not alter his right to be restored, or, if the 



XXVI.] 



ONTARIO LAW REPORTS. 



189 



conditions appeared to be such as to render impossible a con- 
tinuance of the partnership, to a judgment for dissolution, upon 
such terms as the circumstances justified. Whether Living con- 
sidered that a dissolution was effected by what occurred, or con- 
sidered that he was wrongfully expelled, he seems to have ac- 
quiesced, and to have taken no steps either to be restored or to 
procure a taking of the partnership accounts. 

The circumstance that Living paid or was paying a premium 
or bonus could make no difference in this case, where there was 
no stipulation or agreement as to the time of the duration of the 
partnership. 

Whether through oversight or inadvertence, there was no 
agreement that the partnership should continue for a specified 
time or definite period. But the partnership was in fact created; 
and, that being so, its subsequent termination would not create 
a total failure of consideration so as to affect the validity of the note 
in the hands of either Fox or the plaintiffs; although, upon taking 
the partnership accounts, Living might be able to shew himself en- 
titled to a return of part of the premium. The question is dis- 
cussed at length in Jindley on Partnership, 7th ed., p. 625 et seq. 
At p. 626 it is said: “In the first place, assuming the partnership 
to have been in fact created, it is clear that there has not been 
a total failure of consideration for the premium; and, conse- 
quently, it cannot be recovered as money paid for a consideration 
which has failed. In the next place, persons who enter into 
partnership know that it may be determined at any time by 
death and other events; and unless they provide against such 
contingencies, they may fairly be considered as content to take 
the chance of their happening, and the tendency of modern deci- 
sions is to act on this principle.’’ It does not necessarily follow 
that no part of the premium is to be returned in any case. On 
the contrary, it appears from many authorities that in cases 
where the dissolution was not brought about by wrongful con- 
duct on the part of the partner who paid the premium, or under 
circumstances for which he is responsible, a return of part may 
be awarded. But as to what part, the learned author says (p. 
630): “There is no definite rule for deciding in any particular 
case the amount which ought to be returned;” and instances 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 

Moss, C.J.O. 



190 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 

Moss, C.J.O. 



ONTARIO LAW REPORTS. [vol. 

» 

are given of the circumstances which are to be taken into con- 
sideration. 

The defendants’ difficulty in this case is, that they have not 
shewn the circumstances attending the dissolution sufficiently to 
enable a decision to be given as to whether Living is entitled to 
a return of part of the premium. There are charges and counter- 
charges of misconduct on the part of Fox and Living; but they 
are not before the Court; and it was for the defendants, if they 
desired to avail themselves of the defence of partial failure, to 
have put the case in proper train for inquiry. Neither is there 
material upon which can be ascertained what, if any, proportion 
of the premium should be returned — nothing to reduce the amount 
of the indebtedness as represented by the note. The burden 
of shewing this was on the defendants, and it was not for the 
plaintiffs to shew the state of the accounts. Payments, either by 
reduction of the amount of the premium or receipt by Fox of 
profits of the business, were to be proved by the defendants, and 
they failed to shew either. 



The appeal should be allowed and the judgment at the trial 
restored with costs of the appeal to the Divisional Court and 
this Court. 



Meredith, J.A.: — The first question involved in this case is 
one of fact, namely: What was the nature and effect of the trans- 
action between the bank and Fox by which the bank became the 
holders of the promissory note in question, of which he was the 
payee, by virtue of the indorsement of it by him over to their order, 
and the delivery of it at the same time, by him to them. 

We are, of course, not bound by the present impressions, of 
either of the parties to that transfer, as to its true nature and 
effect; memory, at best, is likely to be more or less treacherous, 
and none the less because one of the persons was the manager of 
a bank, upon whose mind impressions of banking transactions 
were being continuously made in large numbers. In such a case 
as this, the surrounding circumstances and the probabilities are 
very useful witnesses. 

Fox was a customer of the bank, and a man whose business 
affairs, or other exigencies, made it necessary Ar expedient for 
him to borrow money from time to time, and the note in ques- 



XXVI.] 



ONTARIO LAW REPORTS. 



191 



tion was, at least, likely to be helpful and to be used in obtaining 
the necessary credit in such an institution as this bank — one of 
the several foremost in this country. 

There are really only three purposes for which it is possible 
that the transfer of the note could have taken place: (1) for 
safe-keeping; (2) as security for money advanced or to be 
advanced; or (3) for collection. 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson, 

Meredith, J.A. 



Safe-keeping — mere custody — is out of the question: no one 
suggests it; it ought not to have been indorsed over if that 
were the intention of the parties. ■ 

Collection alone seems to me to be also out of the question; 
no one testifies to it; and no one, having regard to all the circum- 
stances of the case, could reasonably conclude that such was the 
full nature and effect of the transaction. It was the note of the 
man’s partner, transferred while they were carrying on business 
together, many months before the rupture between them: it 
was not a note of the ordinary mercantile character usually paid 
and taken up through the payee’s banker. What reason can be 
suggested for placing the promissory note of one’s partner in 
a bank for collection: this partner was the principal debtor, and 
he was at hand: if it be suggested that the payee knew or ex- 
pected that the partner would resist payment, then it is almost 
certain that it would be transferred so as to give the bank higher 
rights than the payee’s. 

The testimony of the bank’s manager is that the note was 
taken by the bank, through him, for what it was worth; that 
is, of course, for what it was worth in Fox’s dealings with the bank 
and his obligations to the bank in connection with them, not for 
the small commission to be had for collection if it were paid at 
maturity. The testimony of Fox at the trial was that the purpose 
of the transaction was that the bank should hold the note as 
collateral security for moneys advanced to him from time to 
time; and, he added, “from drafts going through;” words which 
do not seem to me to have been intended to put any express 
limitation upon the extent of the security, but rather to indicate 
that which was in the mind of the witness at the moment of making 
the statement; and was his way of expressing the character of 
the business which he did with the bank and for which they would 
need security; strictly speaking, they must have meant more 



192 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 

Meredith, J.A. 



[VOL. 



than they literally convey. -No security would be needed for 
drafts going through for collection; security would be needed 
only for money advanced, whether on “ paper ” strictly called 
drafts or not. 

It is quite obvious that, if the manager had regard for his 
masters’ interests, or for his own reputation as a banker, he would 
have taken the note as security for such sum as might from time 
to time be advanced by the bank to Fox, especially as there can 
be no manner of doubt that Fox was quite willing that the bank 
should so acquire and hold it; that is, that it should be held as 
security, for the amount of Fox’s indebtedness to the bank from 
time to time in his account with them. If we draw the conclu- 
sion, from circumstances fully warranting it, that the banker 
would take all the security he could get, and would try to get 
more, we shall be very much nearer the truth in almost, if not 
quite, every case, than if, from the same circumstances, we con- 
clude that he would reject security which he might as easily have 
had and would reject it without rhyme or reason. 

So that we have a customer, hungry for credit on the best 
terms obtainable, with a negotiable instrument by which he can 
get more credit and better terms if he pledge it as a standing 
security; and a banker always hungry of every available security; 
and so you might as well expect two hungry men to put aside, 
instead of eating, good food set before them to be eaten, as to 
expect this note under the circumstances to be laid aside for col- 
lection only: I accept Fox’s statement as to the purpose of the 
transfer of it without any sort of doubt. 

There is really nothing, that militates against this view of this 
case, in any of the circumstances relied upon by the respondents: 
it was quite right in any case to enter the note in the bankas 
collection docket: why not? It was in the bank’s interests, 
and no doubt their duty, to send it through the regular process 
for collection. It was not discounted: the proper course of the 
bank seems to me to have been taken in taking the usual steps 
to enable the makers to pay at maturity: and would have been 
taken in placing the proceeds of the note to the credit of Fox’s 
account, if it had been paid. 

If for collection only, it would be odd that, for many weeks 
after it became payable, no steps of any kind were taken respect- 
ing it: remaining as it did is, of course, that which was entirely 



XXVI.] 



ONTARIO LAW REPORTS. 



193 



right if it were a subsisting security. And, beside all this, as 
I have before mentioned, if there were any likelihood of the de- 
fences which are now being set up, k it would have been better 
for Fox that the bank should become and remain throughout 
holders for value, unaffected by any equity in respect of it, to 
the extent of his indebtedness to it. 

The fact that no “ hypothecation paper” was taken with it 
has little, if any, weight. It was a single note, and the course 
of business of the bank in that respect, at the branch where the 
transaction took place, is testified by the manager to have been 
as follows, in this respect: — 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 

Meredith. J.A. 



“Q. And you took a hypothecation, I suppose, at the time? 



A. No. 

“Q. Isn’t that usual when notes are left at a bank, except 
when they are left for mere safe-keeping? A. It is more regular. 
Sometimes one way and sometimes the other.” 

And I cannot think that the testimony of the bank manager 
warrants any such conclusion as that Fox might have taken up 
this note at any time when he was under any liability to the 
bank: he could, of course, have taken it up at any time when 
no such obligation existed; but, of course, at the risk of not 
getting credit when he next sought it. 

If Fox were making, and if in law he could make, an appro- 
priation of the proceeds of the note to the payment of the balance 
of his account by the bank, on the ground that the bank never 
acquired or held the note in this way, would he be likely to suc- 
ceed? We must not let sympathy for the man who made the 
note, and got others to join with him as makers, and who plainly 
has not come very well out of his co-partnership experience with 
Fox, affect the strict legal rights of the parties. If it may be 
said, to the bank, why did you not take a writing evidencing 
the fact, if it were a fact, that you were to hold the note as your 
continuing security? might it not, with much greater force, be 
said to Fox, why did you not take a receipt for the note shewing 
that it was transferred for collection only? and why not take 
the note up, or do something in regard to it, after failure of the 
makers to pay? 

The disinclination of the bank to have the note sued on in 
their name does not help the respondents; if they were collectors 



194 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 

Meredith, J.A. 



[VOL. 



merely in the sense of a collecting agency, they would be less likely 
to have such a disinclination. Such a disinclination is natural 
in any case, and the more jso at the instance of another and for 
his benefit; but, in this case, the bank have been driven to sue 
in their own interests now. 

My conclusion upon the first question involved is, that the 
note was taken and always held by the bank as security for the 
repayment of all that might from time to time be owing by Fox 
to the bank: see Atwood v. Crowdie, 1 Stark. 483. 

If I am right as to the facts, there can be no doubt that the 
note is good, in the bank’s hands, against the makers of it, for 
the amount of the indebtedness of Fox to the bank, for which 
judgment was entered in favour of the bank at the trial: the 
fact that at some times there was nothing due from Fox to the 
bank would not cut out that right or deprive the bank of the 
position of a holder in due course; there would not be by im- 
plication a new transfer of the note as security for each separate 
indebtedness or advance; there would be but the one trans- 
action, to which all changes in the account between Fox and 
the bank would be referable; everything would relate back to 
the one transfer, made while the note was current; although, of 
course, it was quite competent for Fox to have taken up the note 
at any time when there was no obligation on his part to the 
bank: see Atwood v. Crowdie, 1 Stark. 483 — a case extremely 
like this case in substance. 

I would allow the appeal and restore the judgment to the 
extent of the amount of the plaintiffs’ claim proved at the trial. 

Garrow and Magee, JJ.A., agreed in allowing the appeal. 

Maclaren, J.A. (dissenting): — This action was brought by 
the bank against two of the three makers of a joint and several 
promissory note for $2,000 to the order of one C. H. Fox, who 
indorsed it over to the bank before maturity. It was not pro- 
tested, and has not been paid. The action was tried by Boyd, 
C., who held that, under sec. 54, sub-sec. 2, of the Bills of Ex- 
change Act, the bank was entitled to recover against the makers 
the sum of $1,116.39, being the amount of their lien for the in- 
debtedness of Fox. The defendants having appealed to the 
Divisional Court, the judgment was reversed and the action 



XXVI.] 



ONTARIO LAW REPORTS. 



195 



dismissed, on the ground that the bank was not a holder in due 
course, but acquired its lien after maturity and dishonour and 
after a total failure of consideration. Britton, J., dissented. 

The note in question was given under the following agree- 
ment : — 

“I agree to buy one-half interest in the manufacturers’ agency 
of Mr. Chas. Fox, in the city of Vancouver; to have one-half 
interest in all agencies controlled by him and any agencies which 
he shall secure: Mr. Fox to have one-half interest in all agencies 
which I shall secure — for the sum of two thousand dollars ($2,000). 

“That Mr. Fox and myself to each put into the business the 
sum of one thousand dollars ($1,000). 

“That I shall work my way to Montreal, returning to Van- 
couver as soon as possible. 

“Mr. Fox and myself to each draw a stated salary agreeable 
to each other. 

“Balance of commissions, after salary and general expense 
accounts are deducted, to be equally divided. 

“Dated at Vancouver, in the Province of British Columbia, 
this 19th day of March, 1907. C. H. Fox. Alf. H. Living.” 

On the same day, Fox gave Living the following letter: “Van- 
couver, Canada, March 19th, 1907. Mr. A. Living. Dear Sir: 
Confirming our agreement of to-day, it was understood that I 
will at my own expense take a trip to England and Germany 
during the next year to secure better agencies, particularly cutlery, 
household furnishings, and fire-arms. Yours truly, C. H. Fox.” 

Living had not the $2,000 to pay Fox; but, after getting a 
note that was not satisfactory and was returned, he finally per- 
suaded the two defendants, his uncle Thompson, and his mother- 
in-law Mrs. Turley, both of Ottawa, to join him in a joint and 
several note dated Vancouver, July 1st, 1907, for $2,000, payable 
in three months after date, to the order of Fox. 

Early in August, Fox tried to discount this note at the Mer- 
chants Bank, Vancouver; but, after inquiry, the manager, Harri- 
son, declined to discount it. Fox took it away, but on the 12th 
September, 1907, he brought it back and left it with the manager. 
There is a question as to the terms on which it was left, which 
will be considered presently. 

The defendants urged in the Courts below and before us 



C. A. 
1912 

Merchants 
Bank of 
Canada 

v. 

Thompson. 

Maclaren, J.A. 



196 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 

Maclaren, J.A. 



that Fox, when he was the legal holder of the note after maturity, 
had given time to Living, who was his only debtor, the defen- 
dants being merely sureties, and that on this account the defen- 
dants were released. It was held by both Courts that this de- 
fence was not proved; and I am of opinion that they were clearly 
right. 

It was also argued before us that, as the defendants were 
mere accommodation makers, the bank could not, after maturity 
and dishonour, acquire a good title to the note as against the 
sureties, and that they were released by not being notified of 
the dishonour. Being makers, they were not entitled to notice, 
and the mere fact of their being accommodation makers was not 
alone sufficient to prevent the bank acquiring a good title after 
maturity for value, as this is not an equity attaching to a note. 
See Chalmers on Bills of Exchange, 7th ed., p. 130; 1 Daniel 
on Negotiable Instruments, sec. 726; Sturtevant v. Ford (1842), 
4 M. & G. 101. 

When we come to deal with the main question, we find the 
situation a very unsatisfactory one, as the business between 
Fox and Living was done in the most slipshod and irregular 
manner, as were also the dealings between Fox and the bank 
with respect to the note in question. Neither Fox nor Living 
was made a defendant in the present action; but they were 
both witnesses at the trial; and, wherein they differ in their 
testimony, the Chancellor does not express any preference . 
Harrison, the manager of the bank, who personally made the 
arrangements with Fox regarding the note, was not at the trial, 
he having been previously examined at Vancouver under a com- 
mission; so that, as regards his testimony, we are in the same 
position as was the Chancellor. Where his testimony con-, 
flicts with that of Fox, I prefer to accept his version of the facts 
especially as he is corroborated by the books and by the entries 
and records made at the time. As to the terms on which Fox 
left the note with him, Harrison simply says, “He left it with 
me for what it was worth.” 

From the evidence of Harrison it appears that on the 4th 
September, 1907, he had discounted for Fox a $500 note, which 
was current on the 12th September, when the note now sued 
on was left with him at the bank. He also discounted another 



XXVI.] 



ONTARIO LAW REPORTS. 



197 



note for $300 for Fox on the 29th September, 1907. From this 
time onward until the 25th November, 1908, Fox was from time 
to time indebted to the bank in varying amounts; and at times, 
sometimes for weeks at a time, he was free from such indebted- 
ness. From the 25th November, 1908, until this action was 
brought on the 2nd March, 1909, he was indebted continuously. 
Harrison’s evidence as to the position of the note during these 
periods is given as follows: “Q. And at any time during this 
period, when Fox was indebted to the bank, he could have taken 
the note out of your possession and done whatever he chose with 
it? A. Yes, had he chosen.” As a banker, he knew that this 
correctly described the position of the bank with respect to a note 
left with it by a customer, as he says this one was, simply “for 
what it was worth,” and without any special pledging or hypothe- 
cation, and the rights which the bank had under the banker’s 
lien, whereby it has the right to retain any such note for 
any defyt due to it; but has not the right to retain it for 
any liability which has not yet become due or payable. See 
Grant on Banking, 2nd ed., p. 306; 1 Halsbury’s Laws of Eng- 
land, sec. 1258. 

It was urged on behalf of the bank, on the authority of Atwood 
v. Crowdie, 1 Stark. 483, that, although there was no lien when 
there was nothing due, yet, on the $450 note becoming due on 
the 25th November, 1908, the lien of the bank would revive as 
of the 12th September, 1907, the date of the original delivery of 
the note to the bank. 

Such is not the effect of Atwood v. Crowdie. Lord Ellen- 
borough’s holding was not what is claimed, but was that the 
lien on the accommodation bills having ceased to attach when 
the debt was paid “by allowing them to remain in the hands of 
the plaintiffs, the lien revested, when upon fresh advances made, 
the balance turned in favour of the plaintiffs.” What the case 
really decided was that the lien would revive as of the date of 
the fresh advances, and that a party might acquire a lien on 
accommodation bills after their maturity. This case, so far as 
it is in point, is entirely in favour of the defendants, as it would 
shew that the bank is in the position of any other holder 
taking a bill after maturity — it takes it subject to its equities. 
The legal position of the bank in this case is the same as though 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 

Maclaren, J.A. 



198 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Merchants 
Bank of 
Canada 

v. 

Thompson. 

Maclaren, J.A. 



[VOL. 



it had returned the note to Fox when there was nothing owing 
by him, and he had redelivered it to the bank when he again 
became indebted to the bank on the 25th November. 

The next question is, whether there was such a failure of 
consideration as between Fox and Living as would prevent the 
bank from recovering, as was held by the Divisional Court. In 
order to decide as to this, we have to look at their agreement of 
the 19th March, 1907, set out above, and to consider their rela- 
tions and the dealings between them, in so far as they may affect 
this note up to the 25th November, 1908. 

A glance at the agreement will shew how crudely and inarti- 
ficially it is drawn; and a perusal of the agreement and the evi- 
dence will shew how completely each of the parties appears to 
have failed, in almost every particular, to carry out fhe terms 
and stipulations binding upon them respectively. 

The evidence shews that Fox never made over or gave to 
Living the one-half or any other interest in any of the agencies 
he then had or secured afterwards, and that Living never gave 
him the $2,000 or any part of it; that neither of them paid in 
any part of the $1,000 which they were each to contribute as 
capital; that Fox kept sole control of the business premises, his 
own name alone appearing on the sign; that no partnership 
books were ever opened or kept; that the bank account remained 
in the name of Fox individually; and that he did not go to Eng- 
land or Germany, as he undertook to do, in order to secure better 
agencies. The nearest approach to anything like a partnership 
appears to have been their getting a few months after the agree- 
ment some stationery with the name of “Fox & Living” upon 
it. Fox says this was used for some of their correspondence, 
which Living denies. Their proposed partnership amounted to 
so little that, when they quarrelled and Fox put Living out, all 
the latter had to do was to pick up a few private letters off the 
desk and walk out. Up to the time of the trial (nearly two 
years) neither of them had taken any further steps to settle up 
their business. The only question, however, with which we have 
to deal at present is that of the consideration or the failure of 
consideration for the note. This was the $2,000 which Living 
was, under the first paragraph of the agreement, to pay Fox for 
a one-half interest in all the agencies then controlled by Fox, 



XXVI.] 



ONTARIO LAW REPORTS. , 



199 



and in any he might thereafter secure, possibly including his 
undertaking to go to England and Germany at his own expense, 
no part of which was carried out by Fox, so that there was a 
total failure of consideration. This being a defect of title within 
the meaning of sec. 70 of the Bills of Exchange Act, or equity 
attaching to the note, and existing before and at the time that 
the lien upon which the bank sued had its origin, which was 
long after the maturity of the note, the bank could acquire no 
better title than Fox then had; and the note was void for want 
of consideration. 

If the parties were going into matters beyond this, it could 
only be done, as the learned Chancellor suggested, in proceedings 
to which Fox and Living were parties. 

For these reasons and others given by Falconbridge, C.J., 
I am of opinion that the judgment of the Divisional Court was 
right, and should be affirmed. 



C. A. 
1912 

Merchants 
Bank of 
Canada 
v. 

Thompson. 



Maclaren, J.A. 



Appeal allowed; Maclaren, J.A., dissenting. 



[IN THE COURT OE APPEAL.] 

County of Wentworth v. Township of West Flam- 
borough. 



C. A. 
1912 



Highway — Township Boundary Line — “ Deviation ” — Substitution — Municipal April 15 

Act, 1903, sec. 622. 

Held, affirming the judgment of a Divisional Court, 23 O.L.R. 583, that the 
road in question was and is a “deviation” of a town-line road, within the 
meaning of sec. 622 of the Municipal Act, 1903. 

Township of Fitzroy v. County of Carleton (1905), 9 O.L.R. 686, specially 
referred to. 

Appeal by the defendants from the judgment of a Divisional 
Court, 23 O.L.R. 583. 

November 27, 1911. The appeal was heard by Moss, C.J.O., 

Garrow, Maclaren, Meredith, and Magee, JJ.A. 

G. Lynch-Staunton, K.C., for the defendants, argued that the 
judgment of the learned trial Judge should be restored, on the 
ground that the road in question was not a deviation within the 
meaning of the Municipal Act. Reference was made to County 
of Victoria v. County of Peterborough (1889), Cameron’s Sup. Ct. 

Cas. 608, and the same case in (1888), 15 A.R. 617, especially 
per Osier, J.A., at p. 627. 



200 



ONTARIO LAW REPORTS. 



C. A. 
1912 

County of 
Wentwoetii 
v. 

Township 
of West 
Flam- 
borough. 



[VOL. 

J. L. Counsell, for the plaintiffs, relied upon the judgment of 
the Divisional Court and the cases therein referred to. The 
merits of the case are with the respondents, as the road is ad- 
mittedly useful to the defendants, and the money in respect of 
which the claim is made has been properly expended. 

Lynch-Staunton, in reply. 

April 15, 1912. Garrow, J.A. : — Appeal by the defendants 
from the judgment of a Divisional Court reversing the judgment 
at the trial of Middleton, J., who dismissed the action. 

The defendant applied for leave to appeal, and such leave 
was granted, but confined to one point, namely, whether the road 
in question was and is a deviation road. See 2 O.W.N. 1223, and 
note at p. 592 of the report in 23 O.L.R. 

The defendants’ objections to an affirmative answer to this 
question seem to be: (1) as to its origin, which it is said was 
the Carroll plan; and (2) that the road does not return to the 
line of the original boundary line road allowance. 

These objections are not unlike those considered by this Court 
in Township of Fitzroy v. County of Carleton (1905), 9 O.L.R. 
686. There is evidence here, slight it is true, that before the 
registration of the Carroll plan the travelling public had used 
a road in the nature of a trespass road upon or near the line of 
the road afterwards laid out upon that plan, just as in the Fitzroy 
case a trespass road had preceded the formal action of the town- 
ship councils. And in that case, as in this, the deviation did 
not terminate in the boundary line between the two townships 
where it originated, but was carried across another township 
boundary, and thence through that township into the original 
line. The question there arose under sec. 617, sub-secs. (1) and 
(2), of the Municipal Act, 3 Edw. VII. ch. 19. Here it arises 
under sec. 622, which docs not contain the condition in sec. 617 
that the deviation must be only for the purpose of obtaining a 
good line of road. But, notwithstanding that difference, the 
question what, under the statute, is a deviation road, must, 
under both sections, in my opinion, be practically the same. The 
statute gives no definition. Its object, no doubt, was, first, to 
assist the public in obtaining a practical highway, by enabling 
serious obstacles in the true line to be passed around; and, second, 



XXVI.] 



ONTARIO LAW REPORTS. , 



201 



to make the general provisions as to maintenance, whereby the 
burden is fairly apportioned, apply. The question is really more 
one of fact than of law. There must have been a sufficient excuse 
in the nature of the ground to justify an abandonment of the 
original line of road. And it must appear that the deviation was 
intended to serve and is serving the public need, which would 
have been served if it had been reasonably possible to open and 
use the original allowance; but its origin and history are of less 
consequence than the facts existing when the question arises, 
when the main inquiry must be, is the road now a public high- 
way, and is it in fact serving the public purposes which a road 
upon the original allowance would have served? Its direction 
and its nearness to the original line are, of course, not to be dis- 
regarded, for a new road at right angles could scarcely be called 
a deviation within the meaning of the statute. But, while the 
general trend , of the new road should be in the direction of the 
old, it is not, I think, imperatively necessary that the former 
should actually terminate in the latter. The statute does not 
say so, nor, in my opinion, does reason, so long as by means of 
some other public road the original line may conveniently be 
reached. 

The facts here seem to be sufficient to justify the judgment of 
the Divisional Court. For over half a century the public, in 
passing and repassing along the boundary line road so far as it 
was opened, have used the new road, or deviation, to reach points 
which would have been reached over the original allowance if 
it had been opened. And that that was the intention is also, I 
think, established by the circumstance that the county council, 
before conveying the original allowance to Carroll, required a 
report from an engineer, which was furnished, that the new road 
was sufficient for public use. At that time, township boundary 
lines were under the jurisdiction of county councils; and, if the 
new road was not intended to be in substitution for the old, 
and therefore a deviation within the meaning of the statute, 
the matter in no way concerned the county council. 

I would dismiss the appeal with costs. 

Meredith, J.A. : — -The single question raised upon this ap- 
peal is, whether, for the purposes of maintenance and improve- 



C. A. 
1912 

County of 
Wentworth 

v. 

Township 
of West 
Flam- 
borough. 

Garrow, J.A. 



14 — XXVI. O.L.R. 



202 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

County of 
Wentworth 
v. 

Township 
of West 
Flam- 
borough. 

Meredith, J.A. 



ment, that part of the public road in question in this action is 
or is not to be declared part of the town-line lying between the 
townships of East and West Flamborough; it is not upon the 
original allowance for that highway; but, for the plaintiffs, it is 
contended that it is a deviation from it such as is mentioned in 
the various municipal enactments and in respect of which the 
duty of maintenance and improvement attaches in the same 
manner as if it were actually upon such an allowance for such 
a road. 



In considering such a question, regard must be had to the 
purposes of the legislation involved; and such purposes seem to 
me to contain the controlling influence in the consideration of 
this case. 



The purpose of the legislation was to provide convenient 
roads for those to whom the Crown granted lands adjacent to 
them, as well as for all others who might lawfully use them; 
and, in such a case as this, the statute-imposed obligation to 
open, maintain, and improve town-lines, including all such devia- 
tions, is, in very plain words, put upon the adjoining townships. 

So that it was the duty of the defendants, jointly with the 
Township of East Flamborough, to open, maintain, and im- 
prove the town-line in question; but, by reason of natural ob- 
structions and difficulty in the way of such a work, that has 
hitherto been quite impracticable; and the law is not unreason- 
able; it gives power, upon certain conditions, to open a new road, 
in lieu of that laid down in making the original allowance for 
roads, and to close it; and it also provides for deviations; the 
result of all this seems to me to leave the defendants in this pre- 
dicament: if that part of the road in question has not, for the 
purpose of maintenance and repair, become part of the town-line, 
the defendants are, jointly with the other township, under the 
statute-imposed obligation to open, maintain, and improve it — 
an alternative which they would no doubt gladly flee from, even 
though in so doing they ran into that which has been imposed 
upon them in this action. 

I can perceive no good reason why that part of the road in 
question may not properly be deemed part of the town-line for 
the purposes of maintenance and improvement: it is co-extensive 
only with that part of the original allowance which is impassable; 



XXVI.] 



ONTARIO LAW REPORTS. 



203 



if the town-line had to be opened, it was necessary that there 
should be either as extensive a deviation, or the expenditure of 
money vastly exceeding the amount required in making such a 
deviation; and, whether that is essential or not, this deviation 
leads back again to the original allowance, although its main 
purpose — a way into the city of Hamilton — is fulfilled before going 
as far as that. So, too, the main purpose of the original allow- 
ance for road, if opened, would be to give a way into that city. 

The piece of road in question answers all the purposes of a 
deviation; and I am unable to perceive anything that materially 
stands in the way of that view of the case; unless it be that it 
is now not a deviation, but actually part of the line by reason of 
the closing of it, where naturally impassable, and the adoption 
of this piece in lieu of it; an alternative which would not be 
helpful to the defendants. 

The trial Judge seems to me to have taken quite too narrow 
a view of that which a deviation may be. 

I would dismiss the appeal. 

Moss, C.J.O., Maclaken and Magee, JJ.A., agreed that the 
appeal should be dismissed. 



C.A. 

1912 

County of 
Wentworth 

v. 

Township 
of West 
Flam- 
borough. 

Meredith, J.A. 



Appeal dismissed with costs. 



204 



ONTARIO LAW REPORTS. 



'[VOL. 



[IN THE COURT OF APPEAL.] 



C. A. 
1912 

April 15 



Clark v. Loftus. 

Life Insurance — Benefit Certificate — Change of Beneficiaries — Person Bene- 
fiting by Change — Validity — Onus — Agreement N not to Change — 
Failure of Proof — Mental Capacity of Assured — Fraud — Undue Influ- 
ence — Fiduciary Relationship. 



The assured had apportioned the insurance moneys to arise from an 
endowment certificate upon his life, among his wife and two daughters; 
hut, while living at the house of one of his daughters, shortly before 
his death, and when he was in a feeble state, he purported, by the 
execution of a written instrument, to change the apportionment so as 
to make that daughter (the defendant) the sole beneficiary: — 

Held (Garrow, J.A., dissenting), that no agreement between the assured 
and his wife to the effect that the assured would make no change in 
the beneficiaries, was proved; that the onus was upon the plaintiffs 
to shew that the instrument changing the apportionment was invalid 
and ineffectual, and they had not discharged^ that onus ; and that the 
defendant was entitled to the insurance moneys, subject to repayment 
to the widow of the assured of the sums paid by her to keep the certi- 
ficate alive ( as agreed to by the defendant ) . 

Judgment of a Divisional Court, 24 O.L.R. 174, reversed. 

Per Moss, C.J.O. : — The assured had the right by law to change the nom- 
ination of beneficiaries within the scope of the certificate; and, in order 
to avoid his act, it was incumbent upon those impeaching its effect 
to shew mental incapacity or fraud or undue influence, or such a fidu- 
ciary relationship as would shift the onus ; and the plaintiffs had 
shewn none of these things. The affirmative is not proved, because 
the witness for the negative is not wholly and entirely to be believed 
( Nobel’s Explosives Co. v. Jones (1881), 17 Ch.D. 721, 739). The evi- 
dence failed to establish a want of capacity in the assured to under- 
stand the nature of the transaction or to appreciate its effect. 

Per Meredith, J. A. : —“Righteousness,” as applied to proof in such cases 
as Fulton v. Andrew (1875), L.R. 7 H.L. 448, means no more than that 
the document propounded is really the will of the testator: to import 
into the word any such meaning as that it must be proved that the 
will is a fair or just one, or such as a reasonable man ought to make, 
is entirely wrong. The onus shifts; presumption of knowledge and 
approval of the contents of the will, from proof of its due execution by 
a competent testator, to whom the will was read over, or who has 
read it, is displaced: actual knowledge and approval must be proved by 
those who take a benefit under it and who have been instrumental in 
making it; the conscience of the Court must be satisfied, that is all. 
The circumstances were not such as to make it necessary that the de- 
ceased should have the advice of an independent solicitor when effect- 
ing the change of beneficiaries. The agreement relied on was not proved. 
The wife could not be a “beneficiary for value,” not being expressly 
so designated in the certificate. And the Courts below had not found, 
and there could not, on the evidence, be a finding of, either want of 
mental capacity or undue influence. 

Per Garrow, J.A. : — The substantial issue between the parties arose upon 
the plaintiffs’ allegation of fraud and undue influence on the part of 
the defendant in procuring the assured to execute the instrument 
effecting the change of beneficiaries; and that issue, which alone was 
sufficient to dispose of the whole case, should be found in favour of 
the plaintiffs. 



XXVI.] 



ONTARIO LAW REPORTS. 



205 



Appealed y the defendant from the judgment of a Divisional 
Court, 24 O.L.R. 174. 

January 15. The appeal was heard by Moss, C.J.O., Garrow, 
Maclaren, Meredith, and Magee, JJ.A. 

G. H. Watson, K.C., and J. T. Loftus, for the defendant. 
As to the alleged agreement between the husband and wife 
that the apportionment should not be changed, it is submitted that 
no binding agreement has been proved; and, in any event, it could 
not be given effect to, having in view the amendment of sec. 151 
(3) of the Insurance Act, R.S.O. 1897, ch. 203, by 1 Edw. VII. 
ch. 21, sec. 2 (5), which provision must be considered to be retro- 
active. This states that no one can be a beneficiary for value 
unless expressly so designated in the certificate. To revive the 
references to the sections of the Act, reference is made to R.S.O. 
1897, ch. 203, sec. 80, amended by 3 Edw. VII. ch. 15, sec. 3 (2); 
R.S.O. 1897, ch. 203, sec. 151 (3), (4), (5); sec. 159, sec. 160 (1), 
(2). Sub-section 3 of sec. 151 of R.S.O. 1897, ch. 203, is amended, 
as has been stated, by 1 Edw. VII. ch. 21, sec. 2 (5). Then 
sub-sec. 6 of^sec. 2 of the last-mentioned Act amended sub-sec. 2 
of sec. 160 of R.S.O. 1897, ch. 203. Thus these two sub-sections 
introduce into secs. 151 and 160 of the Insurance Act the same 
words. Then 3 Edw. VII. ch. 15, sec. 3 (2), amends sec. 80 of 
the Insurance Act, giving the beneficiary the right to sue in his 
own name. So that the defendant has an absolute statutory 
right to sue to recover these moneys. The plaintiffs failed to 
prove want of mental capacity on the part of the deceased to 
make the change of beneficiaries in question, or that there was any 
fraud or undue influence exercised by the defendant, or that the 
defendant stood in a fiduciary position towards her father. Nor 
has there been any finding on any of these points. There was at 
most only vague suspicion of fraud or undue influence. The 
learned trial Judge erred in treating the document of transfer 
as a will, and applying to it certain rules applicable in some cases 
to testamentary dispositions. The document was not a testa- 
mentary disposition, and the rule invoked had no application to it. 
The learned trial Judge erroneously held that there was an onus 
cast upon the appellant herein: Low v. Guthrie, [1909] A.C. 278, 
which modifies Tyrrell v. Painton, [1894] P. 151. The case of 



C. A. 
1912 

Clabk 

v. 

Loftus. 



206 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Clark 

v. 

Loftus. 



Book v. Book (1900-01), 32 O.R. 206, 1 O.L.R. 86, rather went 
off on the ground that the beneficiary did not take as wife but as 
secured creditor. Besides, sec. 151 (3) was not in force at that 
time. The onus was upon the plaintiffs to prove their case, 
and in this they have failed. The affirmative is not proved merely 
because the witness for the negative is not wholly believed: Nobel’s 
Explosives Co. v. Jones (1881), 17 Ch.D. 721, at p. 739. There 
was no duty cast upon the defendant to advise her father as to 
the nature and effect of his action in altering the apportionment. 
The Court has nothing to do with the fairness or unfairness of the 
transaction, though that consideration seems to have influenced 
one of the learned Judges below in his placing this case within 
the principle of Fulton v. Andrew (1875), L.R. 7 H.L. 348. The 
change which was made was Clark’s act and deed, and that is all 
which it is necessary to shew. 

J. B. Clarke , K.C., and E. J. Hearn , K.C., for the plaintiffs. 
At the time he signed the instrument of transfer, Clark lacked 
the mental capacity to comprehend the nature of the instrument 
or the effect of what he was doing, and the defendant, taking 
advantage of his mental condition, and by the exercise of fraud 
and undue influence, induced him to sign the transfer. Even if 
competent, he was precluded from altering the original nomina- 
tion of beneficiaries, by reason of the agreement between himself 
and the plaintiff Jane Clark that he would not make any change 
in the beneficiaries. This agreement was made before the passing 
of the amendment to the Insurance Act (1 Edw. VII. ch. 21, sec. 
2 (5).) This amendment is not retrospective, and does not apply 
to this case. In any event, the agreement is not within the pro- 
visions of the Act. In the circumstances of this case, the onus 
was upon the defendant to shew that the deceased thoroughly 
understood what he was doing, or at least that he had been pro- 
tected by independent advice: Phillips v. Mailings (1871), L.R. 
7 Ch. 244; McCaffrey v. McCaffrey (1891), 18 A.R. 599. In view 
of the facts found by the learned trial Judge, the document relied 
upon as making a change of beneficiaries ought not to stand : Fulton 
v. Andrew, L.R. 7 H.L. 448, at p. 471; Tyrrell v. Painton, [1894] 
P. 151; Adams v. McBeath (1897), 27 S.C.R. 13; Collins v. Kilroy 
(1901), 1 O.L.R. 503; Low v. Guthrie, [1909] A.C. 278; Malcolm 
v. Ferguson (1909), 14 O.W.R. 737, 1 O.W.N. 77; Kreh v. Moses 



XXVI.] 



ONTARIO LAW REPORTS. 



207 



(1892), 22 O.R. 307; In re Jansen (1906), 12 O.L.R. 63; Milroy 
v. Lord (1862), 4 DeG. F. & J. 264. From the time of making 
the agreement, Clark was a trustee of the policy for the beneficiaries 
named therein, and the appellant, having knowledge of the agree- 
ment and taking the benefit of it, is bound by its terms, and is not 
entitled to take any further benefit arising from a breach of the 
trust which she actively assisted in bringing about, and prepared 
and witnessed herself: Allen v. Wentzell (1909), 7 E.L.R. 575. 
The certificate, or policy, was subject to the rules of the Order 
in respect to the change of beneficiaries. See rule 150. We also 
rely on the reasons given in the judgments below. 

Watson, in reply. There is the right to transfer without 
reference to the rules and conditions. See rule 147 ; also Mingeaud 
v. Packer (1891), 21 O.R. 267, affirmed in (1892), 19 A.R. 290; 
Neilson v. Trusts Corporation of Ontario (1894), 24 O.R. 517; 
Re Harrison (1899), 31 O.R. 314. The other side rests its case 
on suggestions, suspicions, and equities. There was no fiduciary 
relationship, and so the doctrine as to necessity of independent 
advice has no application: Wallis v. Andrews (1869), 16 Gr. 624, 
at p. 641; McEwan v. Milne (1884), 5 O.R. 100; Trusts and 
Guarantee Co. v. Hart (1901), 2 O.L.R. 251, affirmed in (1902), 
32 S.C.R. 553; Fisher v. Fisher (1902), 1 O.W.R. 442; Vandusen 
v. Young (1902), 1 O.W.R. 55; Christian v. Poulin (1902), 1 
O.W.R. 275; Thorndyke v. Thorndyke (1902), 1 O.W.R. 11. 
The effect of the statute since its amendment has been considered 
in several cases. See Re Murray (1904), 4 O.W.R. 281; Lints v. 
Lints (1903), 6 O.L.R. 100; Cartwright v. Cartwright (1906), 12 
O.L.R. 272; In re Cochrane (1908), 16 O.L.R. 328. 

April 15. Moss, C.J.O.: — One James E. Clark, a member 
of the Independent Order of Foresters, and the holder of an en- 
dowment certificate issued by the Order, and dated the 6th March, 
1893, for the sum of $3,000, payable as in the certificate set forth, 
died on the 16th February, 1910. Thereupon a dispute arose 
between the parties hereto as to the right to receive payment from 
the Order of the $3,000 in question. The amount, less expenses, 
was paid into Court by the Order. Pursuant to an order of Court, 
these proceedings were instituted for the determination of the 
question as to which of the parties was entitled to the moneys, 



C. A. 
1912 

Clark 

v. 

Loftus. 



208 

C. A. 
1912 

Clark 

v. 

Loftus. 

Moss, C.J.O. 



ONTARIO LAW REPORTS. [vol. 

and, if more than one was entitled, the proportions in which they 
were to share. 

In the certificate all three were named as beneficiaries; but, 
by an instrument signed by him and dated the 29th November, 
1909, Clark designated the defendant Florence Loftus as the sole 
beneficiary, reserving to himself the right of revocation and sub- 
stitution of other beneficiaries in accordance with the constitution 
and laws of the Order. This instrument remained unrevoked 
at the date of his death. 

The question for trial, therefore, was as to the validity of this 
instrument. It was not admitted by the plaintiffs, but at the 
trial it was clearly proved, that the signature attached to the in- 
strument was Clark’s; and it is not open to question that, as - 
executed by him, it is in form and substance sufficient to effect 
the desired change of beneficiaries. 

But the plaintiffs alleged that, at the time he signed the in- 
strument, Clark was in such a mental condition as to be unable to 
comprehend the nature of the instrument or the effect of what 
he was doing, and that the defendant, taking advantage of his 
mental condition, and by the exercise of fraud and undue influence, 
induced him to sign the instrument. They further alleged that, 
even if competent, he was precluded from altering the original 
nomination of beneficiaries, by reason of an agreement between 
him and the plaintiff Jane Clark that he would not make any 
change in the beneficiaries. 

The learned trial Judge held the instrument of the 29th No- 
vember, 1909, to be invalid and ineffective, but chiefly on his 
view as to Clark’s mental condition when he signed it and as to 
the duty which he considered was cast upon the defendant of 
satisfying the Court that Clark properly understood and appre- 
ciated the effect of his act. He also expressed the opinion that an 
agreement was in fact made between Clark and the plaintiff Jane 
Clark; but, in view of the amendments made to secs. 151 and 160 
of the Ontario Insurance Act, he rested his judgment principally 
upon the other branches of the case. In the Divisional Court 
the judgment was affirmed upon the latter grounds. Mr. Justice 
Clute, by whom the principal judgment was delivered, held that, 
in view of the amendments, effect could not be given to the agree- 
ment. The Chief Justice of the Common Pleas reserved his 



XXVI.] 



ONTARIO LAW REPORTS. 



209 



opinion as to the effect of the amendments. Mr. Justice Teetzel 
agreed in the result. So far, therefore, as expressed opinions are 
concerned, it may be taken that, while it has been found that there 
was an agreement in fact, it could not avail to preclude Clark 
from making the change of beneficiaries. As I have reached the 
conclusion that an agreement in fact has not been proved, it is 
pot necessary to consider the effect of the statute as amended. 
As to what is said to have taken place between Clark and the 
plaintiff Jane Clark on this point, there is no conflict of testimony 
— the proof resting upon what was deposed to by the two plaintiffs, 
taken in the light of subsequent conduct and events. Upon the 
testimony, I am, with deference, of the opinion that no agreement 
is shewn. I think that, at the time in the year 1900 when it said 
the agreement was come to, there was no bargaining and no 
intention to bargain about the matter. It happened that Clark, 
through losses in his business and inability owing to poor health 
to earn any considerable income, concluded that he was unable 
to keep up the payments called for by the certificate. 

The matter appears to have come up in conversation between 
him and the plaintiff Jane Clark, who had separate means. In 
her testimony in chief she thus stated what took place: “Q. When 
he failed in business did he say anything to you about this insur- 
ance? A. Yes, he came and told me that it was to my benefit 
and to the benefit of the children to keep that policy up. Q. 
What else did he say? A. He said that we were — as we were 
beneficiaries for value — Q. He said that you were to pay the 
usual assessments? A. Yes. Q. And if you did not, what 
would happen? A. He said it would be a loss to me and to the 
children. Q. How would it be a loss to you and the children? 
A. Simply because I was paying on it, and of course he said he 
had no means to pay it. . . . Q. Then he said it was for the 

benefit of you and the children? A. Yes. Q. What children? 
A. We never made any difference between Florrie and my own. 
We were all very agreeable. Q. You were to pay the usual 
assessments for the benefit of yourself and the children? A. Yes. 
Q. Did you pay the dues and assessments after that? A. I did.” 
On cross-examination she was asked: “Q. What happened in 
relation to the insurance? A. Well, he had no money to pay on 
it, and I paid it. Q. That was all? A. Yes; I paid it. Q. Was 



C. A. 
1912 

Clark 

v. 

Loftus. 

Moss, O.J.O. 



210 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Clark 

v. 

Loftus. 

Moss, C.J.O. 



[VOL. 

there anything said? A . Yes; he told me it was a benefit for me 
and my children to keep that policy paid, and I did so out of my 
own means. . . . Q. But he did not make an agreement with 

you or anything of that kind? A. Yes; he told me that me and 
my daughters were beneficiaries, and that it was to my benefit 
to keep the policy paid-up and for the benefit of the children. 
His Lordship: Q. Your children included? A. Yes. Mr. Loftus 
(counsel for the defendant) : Q. Why didn’t you state that before? 

A. This is the first time I have had anything to do with any- 
thing like this. That’s right, and Mrs. Loftus knows it . . . 

Q. That is all that was said? A. That is all; he said it was to 
our benefit.” 

The testimony of the other plaintiff, though varying slightly 
in terms, does not carry the matter further. It is true that 
to the question “Was there anything said about it?” she 
answered: “Yes; my father told my mother in my presence 
that he had no means since he failed, and that it was to her benefit, 
my sister’s and my own, to pay that insurance; and, as he had 
no money to do it, that she should do so out of her own money, 
and that she should be benefited by it hereafter, and that it would 
he hers.” But, in her answer to the next question, she shews 
that it was not her understanding that it was to be her mother’s 
any more than any of the others. Asked, “Were you to get any 
benefit of it?” she answered, “Yes; the understanding was that 
we were to share and share alike.” Now, making all proper 
allowance for the suggested inexperience as a witness of the 
plaintiff Jane Clark, which may be considered as very fairly 
offset by the assistance rendered by her counsel in the form of 
leading questions, I am unable to find in this testimony the in- 
gredients of an agreement such as has been found. Clark stated 
what was very probably true, that he was unable to pay, and said 
what was obviously true, that it would be to the benefit of the 
beneficiaries to keep the certificate on foot. He put it before his 
wife as a matter for her consideration, but he made no request 
that she should pay or any stipulation as to what he would do or 
would not do if she continued the payments. That matter was 
never considered or discussed by them. She was left free to act 
on his suggestion or advice or not at her pleasure. Whether as 
a matter of fact some of his means were not employed in making 



XXVI.] 



ONTARIO LAW REPORTS. 



211 



some of the subsequent payments is by no means clear. It is 
shewn that he turned over his earnings to his wife, and there was 
a common fund. As shewing that she knew that she was not 
bound to continue the payments herself, she admits that she made 
application to the defendant to contribute. Payments were 
continued to be made by or through her up to the 30th September, 
1908, when she ceased making them — and, but for the subsequent 
payments being continued by the defendant, the certificate would, 
in all probability, have lapsed. So far as the plaintiffs were con- 
cerned, they had abandoned all intention or desire to keep it on 
foot any longer. 

The element of agreement should, I think, be entirely elimin- 
ated from the case. 



C. A. 
1912 

Clark 

v. 

Loftus. 

Moss, C.J.O- 



Upon the other branches I am also unable to agree to the con- 
clusions reached by the trial Judge and the Divisional Court. 
These conclusions appear to me to be based upon a misappre- 
hension as to the duties and obligations of the defendant under 
the circumstances disclosed by the testimony and as to the onus 
of proof at the trial. No doubt, the burden may shift from time 
to time during the progress of the trial, and it may be assumed that 
in the course of this trial the onus varied from time to time as in 
other cases. The question is, upon whom was it resting, having 
regard to the testimony given, at the time when the evidence 
closed? 

It having — as before mentioned — been shewn beyond question 
that the instrument impeached was signed by Clark, it is scarcely 
necessary to say that the onus of shewing that it was for some rea- 
son or reasons invalid and ineffectual was cast upon the plaintiffs. 

Clark had the right by law to change the nomination of bene- 
ficiaries within the scope of the certificate, and in order to avoid 
his act it was incumbent upon those impeaching its effect to shew 
mental incapacity unfitting him to execute the instrument with 
knowledge and appreciation of its effect, or that he was induced to 
execute it through fraud or undue influence, or that the defendant, 
in whose favour the nomination was made, stood in a fiduciary 
relationship towards her father, that is, that she occupied such a 
position of trust and confidence in regard to him as necessarily 
to lead to the conclusion that she possessed a controlling influence 
over his mind and actions. If the latter case were established. 



212 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Clark 

v. 

Loftus. 

Moss, C.J.O. 



[VOL. 



then the onus might be cast upon her to support the transaction, 
and the question whether she had satisfactorily shewn all that 
was required would arise, but only in that case. 

It was not alleged nor was it proved or found that the de- 
fendant stood in a fiduciary position towards her father. She was 
his daughter, but she was neither his trustee, guardian, or agent. 
There is no evidence that at any time during his life had he re- 
posed any special trust or confidence in her. There existed be- 
tween them nothing but the natural affection of father and 
daughter; no relationship that called upon the daughter to justify 
or explain her father’s action. Assuming capacity and the absence 
of fraud or undue influence, the act was one within his right, 
however unreasonable or unjust towards others it may appear. 
Apart from agreement, with which I have already dealt, Clark 
was in no manner a trustee of the certificate or for any of the 
parties named as beneficiaries; and his act is binding and con- 
clusive, unless the plaintiffs have proved a case of mental in- 
capacity or fraud or undue influence. 

I have given careful attention to the evidence, as well as to 
the' adverse comments of the learned trial Judge upon the tes- 
timony of some of the witnesses; and, after making every allow- 
ance for the advantage which is necessarily enjoyed by the trial 
Judge from having seen the witnesses and noticed their demeanour, 
I am unable to adopt the conclusions arrived at. It may be that, 
if I shared the views of the Courts below as to the burden of proof, 
I should not disagree with their findings. But if, as appears to 
me, it lay upon the plaintiffs to prove their case, then, I think, 
they failed to discharge the onus. 

It has been said more than once that it is a fallacy to suppose 
that the affirmative is proved because the witness for the negative 
is not wholly and entirely to be believed. The affirmative must 
be proved; and to say that a witness for the negative is not 
wholly to be believed is, in no sense of the word, to prove the 
affirmative: Nobel’s Explosives Co. v. Jones, 17 Ch.D. 721, at p. 
739. 

The learned trial Judge was disposed to deal with the question 
of capacity as upon the same footing as if the act was a testamen- 
tary act. As the instrument was intended to take effect in Clark’s 
lifetime, it was probably more in the nature of, though not in all 



XXVI.] 



ONTARIO LAW REPORTS. 



213 



respects similar to, a gift inter vivos. It differed from the latter 
in that it was not absolute in effect, because of the reservation 
of a power of revocation. 

But, however regarded, the evidence fails, in my judgment, 
to establish a want of capacity to understand the nature of the 
transaction or to appreciate its effect. Clark was, no doubt, in 
poor health and had been so from the time when he suffered from 
an attack of paralysis in January, 1909. According to the tes- 
timony of the plaintiff Jane Clark, he was then in the hospital 
for about three weeks, after which he returned home. In April 
he was sufficiently recovered to go to visit an old friend, the 
witness Crompton, at his farm near St. Catharines, where he re- 
mained until some time in June, a period of about eight weeks. 
He appears to have been considered as' of sufficiently good health 
and capacity to take care of himself to be allowed by the plaintiffs 
to make the journey each way unattended. The evidence fails 
to shew any material failure in health or mind between his return 
in June and the signing of the instrument on the 29th November. 
He appears to have suffered pains in his head produced by a blow 
from a trap-door in his factory falling upon him, and which in- 
duced the first paralytic condition. But he went about the 
streets conversing with his neighbours and calling upon his daugh- 
ter the defendant, without it occurring to any one that he should 
be attended. The trivial incidents related by the plaintiffs as 
indicating mental weakness are wholly insufficient to establish 
want of capacity, or inability to understand what he was doing 
when he signed the instrument. It was a single and simple trans- 
action in connection with a certificate with the purport and effect 
of which he was quite familiar, for he had considered and discussed 
it on more than one occasion. His signature appended to the 
instrument compares quite favourably with that appended to the 
agreement concerning the additional rates made with the Order 
in September, 1908, and presents every appearance of having 
been written by one quite capable of controlling his faculties. 
And it is to be noted that the learned trial Judge says that he is 
not satisfied that Clark had not testamentary capacity. 

Beyond vague suspicion, there is really no evidence of fraud 
or undue influence such as is required to be shewn in order to 
invalidate such an act as that here impeached. It is important 



C. A. 
1912 

Clark 

v. 

Loftus. 

Moss, C.J.O. 



214 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Clark 

v. 

Loftus. 

Moss, O..T.O. 



to bear in mind that there was no secrecy about the matter; no 
retaining the instrument so as to prevent scrutiny and inquiry. 
It was sent on to the Order immediately, and the plaintiffs were 
afforded opportunities not only of seeing the instrument, but 
Clark was shewn to have visited the plaintiffs from time to time 
afterwards, and they had every opportunity of ascertaining whether 
or not any improper suggestions had been made to him or his 
mind otherwise unduly influenced. But, beyond endeavouring 
to induce the Order to refrain from recognising the instrument, 
nothing was done or attempted. 

The defendant had paid the arrears due in respect of the cer- 
tificate after the plaintiffs had abandoned making payments, 
and she kept it on foot from that time onwards. Otherwise it 
would have lapsed and have been of no benefit to anybody. 
Having done so, there was no reason why her father should not, 
if he chose, put her in the position of sole beneficiary. In doing 
so he was not bestowing upon her an extravagant sum, and he 
may very justly have considered that, his wife having considerable 
property of her own and having shewn no disposition to keep the 
certificate on foot, his daughter by his first marriage, through 
whose payments it had been kept on foot, might without unfairness 
receive the full benefit of it. 

I would allow the appeal and declare the defendant entitled 
to the moneys in Court, subject, however, to repayment to the 
plaintiff Jane Clark of the sums paid by her in respect of dues and 
assessments as offered and agreed to by the defendant’s counsel. 

As to the costs, the defendant is entitled to her general costs 
of the interpleader proceedings, of the issue, and of the appeal to 
the Divisional Court and to this Court. 



Meredith, J.A. : — 'The dominating factor in the conclusions 
reached in this case hitherto was that which was considered great 
unfairness in the result of the transaction which is in question 
in this action; had that result been the opposite of that which it 
was, that is, had it changed the beneficiaries from the one only 
to the three, no one can doubt that it would have been unhesitat- 
ingly and firmly upheld. It was its want of “ righteousness” 
that caused its downfall. 

Mr. Justice Clute seems to me to have put that very plainly, 
for himself and as to the trial Judge. After quoting the oft- 



XXVI.] 



ONTARIO LAW REPORTS. 



215 



quoted words expressed by Lord Hatherley in the case of Fulton 
v. Andrew , L.R. 7 H.L. 448, at p. 472: “But there is a further 
onus upon those who take for their own benefit, after being in- 
strumental in preparing or obtaining a will. They have thrown 
upon them the onus of shewing the righteousness of the trans- 
action;” he goes on to say: “The rule appears to me to be applic- 
able to a case of this kind, which closely resembles the case of a 
will. So far from the evidence removing the suspicious nature of 
the transaction and shewing the same to be a righteous transaction, 
quite the reverse is the case. The learned trial Judge largely 
discredited the evidence of the defence, and considered the trans- 
action a most unrighteous one.” 

So that two things seem to me to be evident: (1) that there 
has been a grave misunderstanding of the meaning which Lord 
Hatherley intended to convey by the word “righteousness;” 
and (2) that this case is not at all like that with which he was 
dealing, or such cases as Barry v. Butlin (1838), 2 Moo. P.C. 480, 
or Tyrrell v. Painton, [1894] P. 151. 



C. A. 
1912 

Claek 

V. 

Lofttjs. 

Meredith, J.A. 



“Righteousness,” as applied to proof in such cases, means 
no more than that the document propounded is really the will of 
the testator; that it is the duty of those asking the Court to 
pronounce in favour of the will, to prove affirmatively that the 
testator knew and approved of its contents: to import into the 
word any such meaning as that it must be proved that the will 
is a fair or just one, or such as a reasonable man ought to make, 
is, of course, entirely wrong: a testator may be as unreasonable, 
unjust, or capricious as he pleases, without the Court having 
any power to control him; the character of the will may, of course, 
afford evidence upon the question whether the paper propounded 
is really the testator’s will; but some care must be taken fairly 
to treat such things only as evidence; that we do not make them 
an excuse for finding against the validity of the will really because 
we do not approve of its contents. The man or woman who makes 
a will is, it may be, the only one who knows what is just and fair; 
and, in the absence of such knowledge as he or she could impart, 
one should be very careful of condemning his dispositions of his 
property. 

On the other point it is not necessary to do more than point 
out that this is not the case of a controversy arising for the first 



216 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Clark 

v. 

Loftls. 

Meredith, J.A. 



[VOL. 



time after a testator’s death in propounding a writing as his last 
will and testament; the controversy arose in his lifetime, and was 
carried on for some time before his death and before his second 
stroke of paralysis, and carried on by him, on the one side, seeking 
registration of his change of beneficiaries, and the respondents, 
on the other side, opposing it, in the offices of the friendly society 
whose certificate of insurance is the subject-matter of this litiga- 
tion. If there had been any real doubt of the man’s knowledge 
and approval of the change he had made, or of his capacity to 
make it, or that he had duly signed the writing, all that could at 
once have been set at rest, by asking him; but that was not done, 
nor was any attempt, on the part of the respondents, made to in- 
vestigate it; they knew that it had been done, and that they 
could not undo it. 



The learned trial Judge said, among other things in which 
I am quite unable to agree with him, that “the law calls upon the 
person who so takes to explain the circumstances in such a way as 
to remove all shadow of suspicion from the mind of the Judge who 
is called to pass upon the case.” The rule is simply this: the 
onus shifts; presumption of knowledge and approval of the con- 
tents of the will, from proof of its due execution by a competent 
testator, to whom the will was read over, or who has read it, 
is displaced: actual knowledge and approval must be proved by 
those who take a benefit under it and who have been instrumental 
in making it : the conscience of the Court must be satisfied, that 
is all. 



Again, I am quite unable to agree with him in these obser- 
vations also contained in the reasons for his judgment: “The 
situation was one which, more than any other situation one can 
think of, called for the exercise of great precaution. I think 
it called for Mr. Clark receiving advice from an absolutely dis- 
interested and independent solicitor.” It was but a single trans- 
action, of a very ordinary and simple character; the man had 
become dissatisfied with his home, and desired to change it, to 
go and live with the only child of his first wife. He may, or may . 
not, have had real cause for that desire; that in itself is not 
material; he had, as I have said, a right to be capricious; he had 
a right to do just as he pleased with his own. His conduct was 
not unique, it was not even extremely uncommon; as one grows 



XXVI. j 



ONTARIO LAW REPORTS. 



217 



old, the impressions of earlier days are more vivid and attractive 
than those of later days, and one is apt to become exacting and 
more readily dissatisfied; and there is at least this to be said in 
extenuation of this conduct of the man who is not here to justify 
himself, that no great efforts, if indeed any efforts, were made to 
dissuade him from going away or to induce him to remain or 
return. He had got to that age and condition of health that he 
was, no doubt, more or less a burden to those with whom he lived, 
and there can be little, if any, doubt that, rightly or wrongly; 
he was impressed with the idea that his wife thought so. I am 
quite unable to perceive anything so complicated or extraordinary 
in the circumstances as to require the services of any solicitor, or 
what there was in the simple and single transaction that any lay- 
man could not quite comprehend. The man knew that his wife 
and two children were to share equally in the money payable under 
the certificate upon his death — if not changed; he knew that he 
wanted to change that so that one daughter should have all; 
and that all that was needed to effect the change, could be readily 
accomplished through the officers of his “lodge.” He knew also 
that his wife had property of her own, of considerably greater 
value than this certificate; and that he had no other property 
which could go to the child of his first wife. 



C. A. 
1912 

Clark 

V. 

Loftus. 

Meredith, J.A. 



The learned Judge was also emphatic in the opinion that 
Clark ought to have been advised that he was receding from a 
binding bargain, made with his wife, that the beneficiaries of the 
certificate should not be changed. In that I am also quite unable 
to agree, because: (1) no such agreement is proved; and (2), if 
there had been, there would be no object in advising him not to 
do a thing he had no power to do. If there were no binding 
agreement, it was no part of a solicitor’s duty to advise him on 
the moral aspect of his conduct; a solicitor has enough to do in 
keeping his client right in law. 

That there was no such agreement in fact seems to me to 
be plain enough. Notwithstanding the controversy which arose 
fully and sharply in the man’s lifetime, there was no assertion 
of any such contract. In the first statutory declaration of the 
wife, in her opposition to the change being made in the society’s 
records, she made no sort of assertion of any such agreement. 



15 XXVI. O.L.R. 



218 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Clabk 

V. 

Loftus. 

Meredith, J.A. 



In a supplementary declaration, made eight days afterwards, for 
the sole purpose of making such a claim, she put it in these words : — 

“1. That when I began to pay the assessments on the benefit 
certificate on the life of my husband, James Clark, about eight 
years ago, as set forth in my said former declaration, it was at the 
request of the said James Clark that I did so, he intimating to 
me that, as my daughter, May Clark, and myself were two of the 
beneficiaries named in the said policy, and as he had failed in 
business, his membership in the Order and the benefit certificate 
would have to lapse, unless I kept the assessments paid, and many 
times after that, through the period of about seven years that I 
kept the assessments paid out of my own money, he frequently 
spoke to me, encouraging me to keep the assessments paid, and I 
did so with his knowledge and on the understanding that myself 
and my daughter May were to be beneficiaries for value in the said 
benefit certificate. 



“2. I am sure that my husband did not expect, during that 
period, that he would be able to change the beneficiaries in the 
said policy from myself and our daughter, May Clark, without 
my consent and her consent, and I would not have paid the said 
assessments or any of them, but for the fact that she and I were 
two of the beneficiaries named in the said benefit certificate. 
And I now claim, as the fact is, that she and I are beneficiaries 
for value, and I positively object to any change being made in the 
beneficiaries as they stand in the said benefit certificate.” 



Not only is no such contract proved, but, if the case had been 
tried by a jury, there would have been no reasonable evidence to 
submit to them in support of any claim that there was. 

The man, having been, obliged to give up his business, and 
his earning powers being greatly impaired, was unable to keep up 
the periodical payments necessary to keep the certificate in force; 
there were then, practically, but two things which might be done, 
either abandon it, or else make the payments through the family 
purse, to which his wife, through the property which she owned, 
appears to have been the chief contributor from that time on. To 
abandon would have been foolish; to keep up the payments in 
that way was really the only thing to be done; and they all acted 
accordingly, until the man left the household and went to live 



XXVI.] 



ONTARIO LAW REPORTS. 



219 



with his oldest child, when payment out of the household purse 
ceased, and payment was taken up by that child. 



0. A. 
1912 



There is really no sort of evidence of any kind of a binding 
agreement; if there had been, the wife broke it when she ceased 



Clabk 

0 . 

Loftus. 



making payments, and contradicted, if she did not break, it, Meredith, j.a. 
when she, long before that, endeavoured to make the oldest child 
contribute towards the payments. 

There could have been no contract unless the wife was bound 
by it; and how was she in any sense bound? How could she have 
been compelled by any one to make the payments? Nor was it 
suggested, by any of the witnesses, that the husband was to retain 
any separate legal right to an interest in the certificate, or to 
any of the moneys which might become payable under it; so that, 
if the wife had taken over the insurance, as she now claims, it 
would not be for value; all the payments which she made would \ 

be voluntary and for her own benefit only; but that was not the 
character or effect of the dealings between them; it was merely 
the case, and the not uncommon case, of keeping up the payments 
out of the family purse, as I have said. There is no suggestion 
by any one that any kind of provision was made for the possibility 
of the benefits of the certificate becoming available in the man’s 
lifetime; that was never taken into consideration, as it must 
have been if the parties were definitely contracting in regard to 
the rights to accrue under the certificate. It was simply the 
common case of the family taking up the burden of the payments, 
when the head of the house became disabled from fully meeting 
them. The man did not cease to pay, he continued to pay all 
that he was able to pay; his earnings, though perhaps little, all 
went into the family purse. No attempt was made to procure 
an assignment of the certificate or of any rights under it, nor was 
anything of the sort even suggested, as it doubtless would have 
been if the man were to be precluded of all his rights under it. It 
was the every day case of trusting to the husband and father not 
to alter his will. It is out of the question to speak of any one as a 
beneficiary for value of this certificate; such a contention is really 
like catching at a straw to save oneself from drowning. 

But, if any one had been meant to be a “ beneficiary for value,” 
it would be in the teeth of the plainly and emphatically expressed 
intention of the Legislature that no one can be a beneficiary for 



220 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Clark 

v. 

Loftus. 

Meredith, J.A. 



value unless expressly so designated in the certificate; and I 
decline to attempt to dodge that enactment because I am carrying 
a hard case which tempts me to do so. If the man had lived long 
enough to become dissatisfied with his new home, and had gone 
back to his old one, and had again changed the beneficiaries, 
back to his wife and her daughter, a thing which might very well 
have happened, I can hardly think the other daughter would be 
held to be a beneficiary for value, although she took on, even, 
a former understanding that if she paid the premiums the benefits 
would be altogether hers. 



There is no finding of want of mental capacity, on the part 
of the man, to make the change of beneficiaries in question; really 
the contrary has hitherto been found, and rightly so. The man 
was, no doubt, much impaired in physical and mental vigour; 
it may be that he was not either physically or mentally capable 
of carrying on any trade or business, but many an one may be so 
incapable, and yet capable of making a will; and in this case there 
was unquestionable mental and physical capacity to make, and 
thoroughly understand, the change of beneficiaries which he did 
make — there can be no doubt he knew the simple fact that he was 
taking from his wife and his daughter, by her, one-third each of 
the $3,000 so paid under the certificate, and giving the whole sum 
to his only child by a former wife, a thing which, wise or unwise, 
just or unjust, he was determined to do; and there can be no doubt 
that when doing it he knew that his wife had property of her own, 
and that her son and daughter were able to earn, and were earning, 
their own living; he knew a vast deal more than we can on the 
subject of the moral righteousness or justness of his act. 

Nor has it been found that there was any undue influence 
exercised by any one over the man to bring about the change; 
indeed, it seems to be plain that the intention originated in him- 
self, arising, in part, at all events, in his dissatisfaction, whether 
reasonable or unreasonable, with his own home, and in his desire 
to leave it. There was nothing like exclusion from intercourse 
with his wife and her children after he left the household; he was 
indeed a frequent visitor there, according to the wife’s testimony, 
even while the contest over the change of beneficiaries was being 
waged in the society: — 

“Q. You say he went to Mrs. Loftus in November. 1908; 



XXVI.] 



ONTARIO LAW REPORTS. 



221 



had he been at your house after that? A. Yes, he came over 
next morning, and came over every other day for a week or so, 
while he was able to go out. 

“Q. Up to what date? A. I don’t know, but I know he came 
over the whole time he was there, while he was able to go out; 
while he was able to walk from Mrs. Loftus’s, he came over to 
see me. 



C. A. 
1912 

Clark 

Loftus. 

Meredith, J.A. 



“Q. He was able*until after New Year’s; was he over after 
New Year’s to your place? A. Well, I cannot say whether he 
was or not; he was over, but he had two strokes in Mrs. Loftus’s 
house. I did not know when he had them. I was not notified 
of them. 

“Q. Was he over after the first stroke? A. Yes, after the 
first stroke he had at Mrs. Loftus’s. 

“Q. That was about the New Year? A. Then he came over 
after that.” 

After the inability of the trial Judge — though so strongly 
desirous of upsetting the transaction — to find undue influence, 
and after the inability of the Divisional Court to do so, it would 
be an extraordinary thing for this Court to do so, even if there 
had been some substantial evidence of it, and even if the persons 
concerned were not the reputable people the evidence shews them 
to be. 



If I were at liberty to substitute my will for. that of the dead 
man in the distribution of this money, I would very willingly 
cancel the later “ designation” and set up the earlier one, in 
accordance with my sense of what would be fairer and juster, in 
the dim light *which the case throws upon the knowledge which 
the man had, and upon his real and full reasons for acting as he 
did; but, as I have no manner of doubt that the change was made 
by him of his own free will, I have no more power to alter it, accord- 
ing to my notions of moral right and wrong, than he, if living, 
would have to change my will. 

I would allow the appeal and give effect to the change, which 
was made under the statute, and so is not controlled by the rules 
of the society. According to the practice of this Court, and, as 
I understand, the consent of the appellant, the money paid by 
the respondents or any of them in keeping the certificate in force, 
with interest, should be repaid out of the fund in Court. 



222 



ONTARIO LAW REPORTS. 



[VOL. 



I have not gone into the question, dealt with by Mr. Justice 
Clute, whether any such rule as that involved in the case of 
Andrew v. Fulton is applicable to such a case as this; that is not 
necessary; if the transaction were a contract, it would not apply; 
if it were a gift merely, some such rule might very well be applied, 
for after all it comes down to this simply: Was the act, mentally 
and physically, really that of the donor? 

Maclaren and Magee, JJ.A., agreed in allowing the appeal. 

Garrow, J.A. (dissenting): — Appeal by the defendant from 
the judgment of a Divisional Court affirming the judgment of 
Middleton, J., in favour of the plaintiffs, upon the trial of an issue 
between the parties as to the ownership of certain money in Court, 
the proceeds of a policy on the life of the late James E. Clark. 

James E. Clark was the husband of the plaintiff Jane Clark, 
his second wife, and the father of the plaintiff May Clark. He 
was also the father of the defendant, by his former wife. 

The policy, dated the 6th March, 1893, was in the form of an 
endowment certificate issued by the Independent Order of For- 
esters, and the beneficiaries therein named were the plaintiffs 
and the defendant in equal shares. 

In the month of January, 1909, James E. Clark had a severe 
stroke of paralysis, from which he never completely recovered- 
Up to the month of November, 1909, he resided with his wife 
and children, other than the defendant, in a house owned by his 
wife, but on the 22nd of that month he left his home and went to 
reside with the defendant, where he remained until his death on 
the 16th February, 1910. After the stroke, he had been in the 
habit of going frequently to the defendant’s house. Two days 
before he went finally to reside with her, he informed her of his 
intention to leave home. 

In her evidence the defendant said: “About the 20th of No- 
vember my father came to me, and he was crying; he started 
crying and said they had another quarrel over home with Mrs. 
Clark, and that he was not going to stand her nonsense any longer; 
that, if I could not take and do anything for him, he would go 
into some Home, and it was then we first spoke about his coming 
to livejwith me. He came two days after that.” 



C. A. 
1912 

Clark 

v. 

Loftus. 

Meredith, J.A. 






XXVI.] 



ONTARIO LAW REPORTS. 



223 



On the day that the deceased came to live with the defendant, 
steps were taken to alter the apportionment of benefit under the 
policy by giving it all to the defendant, and a written document 
to that effect was prepared and executed by the deceased and sent 
to the insurers, but had not been assented to by them in his life- 
time. The defendant says that the suggestion came first from 
the deceased; but, even on her own shewing, she seems to have 
had no compunction in accepting the change, and even in assisting 
her father to bring it about. 

There had, as the plaintiffs contend, been an agreement be- 
tween the deceased and the plaintiff Jane Clark, made several 
years before his death, that, if she would keep up the payments 
of premium on the policy, the deceased would not change the 
apportionment. And, in pursuance of this arrangement, the 
plaintiff and her daughter May had made a number of payments 
of premiums. At the time of the first paralytic stroke, there 
were some arrears. These were, at that time, paid by the defend- 
ant, who continued to pay the premiums until her father’s death, 
the total of such payments amounting to about $82. 

There was conflicting evidence as to the mental condition 
and capacity of the deceased at the time when the document 
changing the apportionment was executed; the witnesses for the 
plaintiff stating that he had then become weak in mind, as well as 
in body, while those of the defendant considered him to be in his 
normal condition, although weak in body. 

Middleton, J., was of the opinion that the circumstances 
brought the case within the rules as to testamentary dispositions 
procured or brought about by a beneficiary, laid down in such 
cases as Barry v. Butlin, 2 Moo. P.C. 480, and subsequent cases; 
that, from the month of September before his death, “the old man’s 
mind was in the extremity of weakness, and that he was not fit 
to exercise testamentary powers, unless he had very careful 
guidance to see that all proper precautions were taken to compel 
him to realise the actual situation. . . I am not satisfied 

that he had not testamentary capacity; but I think it is incumbent 
upon those attempting to set up any testamentary act or any act 
in the nature of a testamentary act to see that all extraneous 
influence was excluded.” And that he should have received 
advice from an absolutely disinterested and independent solicitor. 



0. A. 
1912 

Cl auk 

V. 

Loftus. 

Garrow, J.A. 



224 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Clark 

v. 

Loftus. 

Garrow, J.A. 



The learned Judge also expressed dissatisfaction with the explana- 
tion of the transaction in its inception given by the defendant. 
And he held that the agreement between the deceased and his 
wife as to the payment of premiums operated to prevent the de- 
ceased from changing the apportionment. 

In the Divisional Court, Clute, J., delivered a judgment upon 
practically similar lines, agreeing with Middleton, J.; and Mere- 
dith, C.J., in a brief judgment, said that he agreed with Clute, 
J., that the transaction was one which, under the circumstances, 
could not stand, but declined to express an opinion upon the effect 
of the agreement as to the payment of premiums made between the 
deceased and his wife. Teetzel, J., agreed in the result. If the 
plaintiffs’ case rested solely upon the agreement said to have been 
made between the deceased and his wife, I would have had some 
difficulty in following the conclusion of Middleton, J. I even 
doubt whether, upon the whole evidence, an actual binding agree- 
ment was ever made. The impression which I gather from the 
evidence is, that the deceased, finding himself unable to continue 
to pay, simply turned the matter over to his wife, advising her 
that it would be to the advantage of the family to keep up the 
payments. This, which is, I think, something less than a binding 
agreement, would explain the application subsequently made by 
the plaintiff Jane Clark to the defendant, to assist in keeping up 
such payments, and possibly also the fact that the plaintiff Jane 
Clark latterly did not keep them up. Nor, with deference, am 
I able to agree that the case can be properly dealt with upon the 
footing of a testamentary disposition procured by the defendant, 
so as to admit of the application of the rule as to evidence in the 
case of wills to which Middleton, J., refers. 

The substantial issue between the parties, it seems to me, 
arises upon the plaintiffs’ allegation of fraud and undue influence 
on the part of the defendant in obtaining from the deceased the 
execution of the document in question. And upon that issue, 
which is alone quite sufficient to dispose of the whole case, I would 
without hesitation find in favour of the plaintiffs. 

The learned trial Judge found as a fact, upon conflicting evi- 
dence, that at the time of the transaction the deceased was of 
weak mind. 

No consideration was paid or agreed to be paid by the de- 



XXVI.] 



ONTARIO LAW REPORTS. 



225 



fendant for the transfer. She knew her father’s condition and 
circumstances, and also that the policy had been kept alive by the 
plaintiffs, and must, therefore, have known that what, as she 
alleges, he proposed to do was at least unfair, and even dishonest, 
as against them. He came to the defendant, having left his own 
home without any sufficient cause; and steps were immediately 
taken, not to heal the breach, but to obtain the transfer now under 
attack. Under these circumstances, the defendant was, I think, 
bound to shew by satisfactory evidence, that the deceased thor- 
oughly understood what he was doing, or at all events that he 
had been protected by independent advice: see Phillips v. Mul- 
lings, L.R. 7 Ch. 244, at p. 246; McCaffrey v. McCaffrey , 18 A.R. 
599. 

Middleton, J., who saw the witnesses, has expressed his dis- 
satisfaction with the explanatory testimony adduced by the 
defendant concerning the transaction; and it is not even pre- 
tended that there was independent advice. 

Under these circumstances, the transaction in question is 
one which, in my opinion, cannot be supported; and the appeal 
should be dismissed with costs. 

Appeal allowed; Garrow, J.A., dissenting. 



[IN THE COURT OF APPEAL.] 

Re City of Toronto and Toronto R.W. Co. 

Street Railways — Interchange of Traffic — Ontario Railway Act, 1906, sec. 
57(6) — Application of — Order of Ontario Railway and Municipal 
Board — Jurisdiction — Municipal Corporation — Railways not yet Con- 
structed. 

An order made by the Ontario Railway and Municipal Board, determin- 
ing, ordering, and declaring that sec. 57 of the Ontario Railway Act, 
1906, should apply to the Toronto Railway Company and to the rail- 
ways owned and operated by that company, and to the Corporation of 
the City of Toronto and the street railways to be constructed by that 
corporation, was held to be beyond the powers of the Board. 

Per Moss, C. J.O. : — The question turns upon the proper view to be taken 
of sub-sec. (6) of sec. 57, read in connection with and in the light otf 
the other portions of the section. Under sub-sec. (4) the powers of the 
Board arise only when there has been inability to agree upon the 
matters there specified. And these powers are confined to determining 
in respect of these matters. Sub-section (6) enables the Board to deal 
with street railways, but does not say that it is to do so under cir- 
cumstances different from those under which they deal with steam 
railways, by virtue of sub-sec. (4). There is no warrant for such a wide 
departure from the manifest object and scope of the section as to 
adapt it to a case where there are not two existing and operating lines 
before the Board, upon application made by one or more of the parties 
interested. 



C. A. 
1912 

Clark 

17 . 

Loftus. 

Garrow, J.A. 



C. A. 
1912 

April 15 



226 



ONTARIO LAW REPORTS. 



[VOL. 



C.A. 

1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 



Per Meredith, J.A.: — Reading the whole section together, and having 
due regard to the purpose of the Legislature, gathered from the whole 
Act, sub-sec. (-6) applies only to interchange between existing street 
railways. 

Per Magee, J.A. : — The word “company,” as used in sec. 57, does not in- 
clude a municipality; and a municipality is not liable under sec. 57 
to be compelled to interchange traffic with any street railway or other 
railway company; and, therefore, that part of the order of the Board 
which dealt with the city corporation and the railways to be constructed 
by that corporation, was not within the powers of the Board. The 
order with respect to the company’s railways would, if it stood alone, 
be quite within the powers of the Board; yet, being made upon a non- 
existent basis, and with a view to an impossible result, and made 
without consideration of its effect upon the company with regard to 
any other railway or street railway, it was not warranted in law 
and should be declared invalid. 



By an order made by the Court of Appeal on the 17th Novem- 
ber, 1911, the Toronto Railway Company were allowed to appeal 
to that Court from an order made by the Ontario Railway and 
Municipal Board on the 24th June, 1911. 

The order of the Board was made upon the application of the 
Corporation of the City of Toronto, which application was as 
follows : — 

“The applicant hereby makes application for an order of the 
Ontario Railway and Municipal Board, directing and ordering 
the respondent to afford all proper and reasonable facilities for 
the receiving and forwarding of passenger traffic upon and from 
the several railways belonging to the respondent, and those to 
be constructed by the applicant upon St. Clair avenue and 
Gerrard street, in the city of Toronto; and providing for the 
return of cars, motors, and other equipment belonging to either 
the applicant or the respondent, and used for the purpose of 
receiving or forwarding such traffic, so as to afford all passengers 
on the cars of the municipal system passage over the tracks of 
the respondent company as a continuous line of communication 
without unreasonable delay and without prejudice or disadvan- 
tage in any respect whatsoever, and so that no obstruction may 
be offered in the use of the Toronto Railway system and lines 
to be laid by the applicant as a continuous line of communica- 
tion, and so that all reasonable accommodation may at all times 
be mutually afforded by and to the said applicant and the said 
respondent. 

“And for an order that the respondent company and its rail- 
way system shall be subject to and governed by the provisions 
of sec. 57 of the Ontario Railway Act, 1906.” 



XXVI.] 



ONTARIO LAW REPORTS. 



227 



The order made by the Board was as follows: — 

“1. This Board determines, orders, and declares that sec- 
tion 57 of the Ontario Railway Act, 1906, shall apply to the 
Toronto Railway Company and the street railways owned and 
operated by the said company. 

“2. This Board further determines, orders, and declares that 
section 57 of the Ontario Railway Act, 1906, shall apply to the 
Corporation of the City of Toronto and the street railways to 
be constructed by it.” 

Section 57 of the Ontario Railway Act, 1906, 6 Edw. VII. 
ch. 30, is as follows: — 

57. — (1) The directors of any railway company may at any 
time, and from time to time, make and enter into any agreement 
or arrangement with any other company, either in this Province 
or elsewhere, for the regulation and interchange of traffic passing 
to and from the railways of the said companies, and for the 
working of the traffic over the said railways respectively, or for 
either of those objects separately, and for the division and ap- 
appointment of tolls, rates and charges in respect of such traffic, 
and generally in relation to the management and working of the 
railways, or any of them, or any part thereof, and of any rail- 
way in connection therewith, for any term not exceeding twenty- 
one years, and to provide, either by proxy or otherwise, for the 
appointment of a joint committee or committees for the better 
carrying into effect such agreement or arrangement, with such 
powers and functions as may be considered necessary or ex- 
pedient, subject to the consent of two-thirds of the shareholders, 
voting in person or by proxy. 

(2) Every railway company shall, according to their respec- 
tive powers, afford all reasonable facilities to any other railway 
company for the receiving and forwarding and delivering of 
traffic upon and from the several railways belonging to or worked 
by such companies respectively, and for the return of carriages, 
trucks, and other vehicles; and no such company shall give or 
continue any preference or advantage to or in favour of any par- 
ticular company, or any particular description of traffic, in any 
respect whatsoever, nor shall such company subject any par- 
ticular company or any particular description of traffic to any 
prejudice or disadvantage in any respect whatsoever; and every 



C. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 



228 



ONTARIO LAW REPORTS. 



a a. 

1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 



[VOL. 



railway company having or working a railway which forms part 
of a continuous line of railway, or which intersects any other 
railway or which has a terminus, station or wharf of the one near 
a terminus, station or wharf of the other, shall afford all due 
and reasonable facilities for receiving and forwarding by the one 
of such railways, all the traffic arriving by the other, without 
any unreasonable delay and without any such preference or 
advantage, or prejudice or disadvantage as aforesaid, and so 
that no obstruction may be offered in the using of such railway 
as a continuous line of communication, and so that all reasonable 
accommodation may at all times, by the means aforesaid, be 
mutually afforded by and to the said several railway companies. 

(3) If any officer, servant or agent of a railway company, 
having the superintendence of the traffic at any station or depot 
thereof, refuses or neglects to receive, convey or deliver at any 
station or depot of the company for which they may be destined, 
any passenger, goods or things, brought, conveyed or delivered 
to him or to such company, for conveyance over or along the 
railway from that of any other company, intersecting or coming 
near to such first-mentioned railway, or in any way wilfully 
contravenes the provisions of the next preceding sub-section — 
such first-mentioned railway company, or such officer, servant 
or agent, personally, shall, for every such neglect or refusal, incur 
a penalty not exceeding $50 over and above the actual damages 
sustained. 

(4) In case any company or municipality interested is unable 
to agree as to the regulation and interchange of traffic or in 
respect of any other matter in this section provided for, the 
same shall be determined by the Board. 

(5) All complaints made under this section shall be heard and 
determined by the Board. 

(6) This section shall apply to such street railways as may 
from time to time be determined by the Board. 

January 22. The appeal was heard by Moss, C.J.O., 
Garrow, Maclaren, Meredith, and Magee, JJ.A. 

H. S. Osier, K.C., for the appellants, argued that the Board 
had no power under sec. 57 (6) of the Ontario Railway Act to 
make the order in question. The language of the Act could only 
refer to railways in existence, and was not intended to enable 



XXVI.] 



ONTARIO LAW REPORTS. 



229 



a corporation desirous of building a railway to ascertain in ad- 
vance the terms upon which it could interchange traffic with 
an existing railway. The statute shews that the Board must 
have all the facts before it before making such an order, and 
the necessary evidence has not been obtained in the present case. 

H. L. Drayton, K.C., and G. A. Urquhart, for the respondents, 
argued that the question at issue was merely an academic one, 
as the city’s railways would soon be finished. The jurisdiction 
of the Board to make the order appealed against is plain under 
sec. 57 (6) of the Act, and the appellants are not entitled to rely 
on the absence of evidence which they could have supplied at 
the hearing, if they had desired to do so. 

Osier, in reply, argued that the question was not merely 
academic; and, even if it were, the statute should not be con- 
strued in the way suggested by the respondents, in the absence of 
clear and specific words to the effect contended for. 

April 15. Moss, C.J.O.: — In the view which I take of the 
question raised by this appeal, it is not necessary to discuss or 
consider at length many of the arguments which were forcibly 
presented against and in support of the order appealed from. 

As a practical operative order, it works no substantial advan- 
tage to the city and it imposes no real disadvantage upon the 
company. It settles nothing of a practical nature, and, as a 
declaratory order, does nothing towards making effective the 
provisions of sec. 57 of the Ontario Railway Act, 6 Edw. VII. 
ch. 30, as between the parties hereto. 

Whether, if the Board had the power to issue the order, it 
rightly exercised it, is a question with which we have no con- 
cern. It is right to assume that, when its power to determine 
is invoked, the Board will not undertake to determine without 
having first informed itself of all the existing conditions, 
and considered whether the circumstances shewn make it just 
and proper to put the provisions of the section into effect as 
between the street railways then before it. 

The question of power turns, as it appears to me, upon the 
proper view to be taken of sub-sec. (6) of sec. 57 of the Railway 
Act, read, of course, in connection with and in the light of the 
otherjportions of the section. 



0. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 



230 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 

Moss, C.J.O. 



I am unable to satisfy myself that in this case the circum- 
stances had arisen which, upon a careful study of the section, 
I think must occur before the power under sub-sec. (6) is called 
into action. 

It is, of course, undeniable that primarily the provisions of 
the section deal only with steam railways, and are intended to 
govern the regulation and interchange of traffic between trans- 
portation agencies of that character. And it is also quite plain 
that the legislation contemplates existing operating companies 
actually engaged in carrying traffic, which includes, no doubt, 
passengers, as well as goods. Thus sub-sec. (1), providing for 
agreements between companies speaks of “traffic passing to and 
from the railways of the said companies,” of “the working of 
the traffic over the said railways,” of “the division and appor- 
tionment of tolls, rates and charges in respect of such traffic,” 
and of “the appointment of a joint committee or committees for 
the better carrying into effect such agreement.” So, too, sub- 
sec. (2), imposing upon a company an obligation to afford facili- 
ties to other companies, speaks of “the receiving and forwarding 
and delivering of traffic,” of “the return of carriages, trucks, 
and other vehicles,” of a company “having or working a railway 
which forms part of a continuous line of railway, or which inter- 
sects any other railway,” of the duty of such a company to 
“afford all due and reasonable facilities for receiving and for- 
warding by the one of such railways, all the traffic arriving by 
the other.” Again, sub-sec. (3), dealing with penalties, speaks of 
refusal or neglect “to receive, convey or deliver at any station 
or depot of the company for which they may be destined, any 
passenger, goods or things, brought, conveyed or delivered . . . 
for conveyance over or along the railway from that of any other 
company, intersecting or coming near to such first-mentioned 
railway.” 

All these point plainly and unmistakably, not to projected 
or contemplated railways, but to railways actively engaged in 
the business of conveying passengers and goods upon and over 
their lines. It is only when they are found in that condition 
that they can be usefully rendered available for carrying out the 
objects aimed at. 

Sub-section (4) brings the Board into requisition where there 



XXVI.] 



ONTARIO LAW REPORTS. 



231 



is a failure or inability to agree as to the regulation and inter- 
change of traffic or any other of the matters provided for, and 
empowers it to determine upon an agreement according to the 
terms of which the mutual services prescribed by the previous 
portions of the section shall be performed by the parties interested. 

But, before the Board’s powers can come into play, it must 
find, and be prepared to deal with, a case of (a) at least two 
existing operating companies, engaged in receiving, forwarding, 
and delivering traffic with railways forming parts of a continuous 
line or intersecting each other or having termini, stations, or wharves 
near to each other; in fine, operating and carrying on the busi- 
ness of transportation of passengers or freight or both under 
the circumstances detailed in the preceding portion of the sec- 
tion; and (b) inability to agree as to the regulation and inter- 
change of traffic or in respect to the other matters provided for. 

Now, is there anything in sub-sec. (6) to shew that in the 
case of street railways there is to be any different mode of treating 
the matter? 

It says “this section,” that is, the preceding provisions of the 
section, “shall apply to such street railways as may from time 
to time be determined by the Board.” Is it intended by this 
enactment to do more than to apply the provisions of the sec- 
tion to street railways which the Board shall find holding towards 
each other, relatively at least, the same position as steam rail- 
ways? That it was not so intended seems to be manifest from 
the language. Under sub-sec. (4) the powers of the Board arise 
only when there has been inability to agree upon the matters 
there specified. And these powers are confined to determining 
in respect of these matters. Sub-section (6) enables the Board 
to deal with street railways, but does not say that it is to do so 
under circumstances different from those under which they deal 
with steam railways, by virtue of sub-sec. (4). In other words, 
the Board, when it finds two or more existing operating street 
railways before it, upon application made by one or more of the 
parties interested, is to determine whether, as regards the street 
railways before it, there is a case proper for intervention under 
sub-sec. (4). It may be that the Board should have regard, 
upon such an application, to the differences in methods of trans- 
port and the conduct of business between the two systems; but 



0. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 



Moss, C.J.O. 



232 



ONTARIO LAW REPORTS. 



[VOL. 



0. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 

Moss, C.J.O. 



there does not appear to be any warrant for such a wide departure 
from the manifest object and scope of the section as to adapt it 
to a case where there are not two existing and operating lines 
before the Board upon the application. 

The application is intended to result in something practical 
in the form of an order determining the terms and conditions 
upon which the regulation or interchange of traffic is to take 
place. There is no indication anywhere that the Board is to 
deal with any but a state of circumstances outlined in sub- 
sec. (4). 

For these reasons, I think that, under the then existing cir- 
cumstances, the order made was not within the SGope of the 
Board’s powers under sec. 57, and that it should not stand. 

The appeal should be allowed, with the usual result as to 
costs. 



Garrow and Maclaren, JJ.A., concurred. 

Meredith, J.A. : — The main part of the respondents’ applica- 
tion to the Board makes manifest its premature character; it is 
in these words: — 

“The applicant hereby makes application for an order of the 
Ontario Railway and Municipal Board, directing and ordering 
the respondent to afford all proper and reasonable facilities for 
the receiving and forwarding of passenger traffic upon and from 
the several railways belonging to the respondent, and those to 
be constructed by the applicant upon St. Clair avenue and Gerrard 
street, in the city of Toronto; and providing for the return of 
cars, motors, and other equipment belonging to either the appli- 
cant or the respondent, and used for the purpose of receiving or 
forwarding such traffic, so as to afford all passengers on the cars 
of the municipal system passage over the tracks of the respondent 
company as a continuous line of communication without un- 
reasonable delay and without prejudice or disadvantage in any 
respect whatsoever, and so that no obstruction may be offered 
in the use of the Toronto Railway system and lines to be laid by 
the applicant as a continuous line of communication, and so 
that all reasonable accommodation may at all times be mutually 
afforded by and to the said applicant and the said respondent.” 



XXVI.] 



ONTARIO LAW REPORTS. 



233 



To an ordinary mind it must seem extraordinary, at the least, 
for any one to apply for an interchange of passenger traffic, cars, 
motors, and other equipment, not only without having any to 
interchange, but without having even a railway to run them 
over; indeed, so extraordinary that, although the Board was 
plainly anxious to aid the applicant all it could, this part of the 
application is not even adverted to in the formal order made by 
it upon the application. 

The earlier provisions of the enactment in question — the 
Railway Act, sec. 57 — make it clear to me, upon their face, that 
they relate only to existing railways. The agreement which rail- 
way companies may make is for the “ interchange of traffic passing 
to and from the railways” of such companies: evidently existing 
railways capable of actually making such an interchange; and 
in practice almost necessarily so. Then every railway company 
is to afford reasonable facilities to any other railway company 
for receiving, forwarding, and delivering traffic upon and from 
the several railways belonging to or worked by such railway 
companies respectively; again, existing railways, of course. And 
then a penalty is provided for refusal or neglect to forward traffic 
over, necessarily, an existing railway. 

All this seems to be so plain, and so, for practical purposes, 
necessary, that there was little, if any, controversy over it: but 
it was urged, for the respondents, that, under sub-sec. (6) of 
sec. 57, the Board had power to determine that that section 
should apply to the appellants’ railway: Mr. Drayton seemed 
to take refuge in this last ditch; but, If or several reasons, in my 
opinion, he cannot hold it: in the first place, the order in ques- 
tion was not made upon the Board’s own motion, but was based 
entirely upon the respondents’ application, upon which they can 
take nothing and which they had no power to make; and, there- 
fore, the order was made without jurisdiction: in the second 
place, the Board had no intention to make, and did not make, 
any such order; its order was intended to embrace, and does 
in terms embrace, both parties to the application and the rail- 
way of the one and the proposed railway of the other: to strike 
out that part of the order which relates to the respondents, and 
their proposed railway, and to let the rest stand, would be to make 
a new, and different, order, of a very different character and 



C. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 

Meredith, J.A. 



16 — XXVI. O.L.R. 



234 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 

Meredith, J.A. 



effect, from that intended to be made, and actually made, by 
the Board; and one which, I can hardly think, they would have 
thought of making; and which, if they had made it, could not, 
in my opinion, stand. The purpose of the Board was to make 
provision so that there should be an interchange of traffic be- 
tween the railway of the appellants and that of the respondents, 
when it comes into existence; and that alone was the purpose 
of the application to them by the respondents. Take away the 
order against the respondents, and what remains is something 
never contemplated by the parties or the Board, and which, 
I should imagine, no one desires. It would give the prospective 
railway of the respondents nothing: they would be obliged to 
apply again to the Board when they have a real railway, not 
merely power to build it; whilst the effect upon the appellants 
and their railway would be this, that they would be bound to 
interchange traffic, including carriage trucks and other vehicles, 
with every “ steam’ ’ railway under the legislative power of the 
Legislative Assembly; and also with any other street railway, 
municipal or otherwise, which the Board might see fit to bring 
into the provisions of sec. 57, or which is already within them, 
under sub-sec. (6); that is, of course, if the Board’s power be as 
wide under that sub-section as the respondents contend for; but, 
lastly, its power under that sub-section is, in my opinion, much 
narrower than that, and does not extend to the making of an 
unlimited order of that character. Reading the whole section 
together, and having due regard to the purpose of the Legis- 
lature, gathered from the whole Act, sub-sec. (6) applies only 
to interchange between existing street railways: it does not 
authorise the making of an omnibus order against any street 
railway company, putting upon it an obligation to interchange 
with every sort of a railway under provincial legislative power, 
with the limitation only that, as to other street railways, an 
omnibus order shall be made respecting % them. The very nature 
of the thing seems to me to require that the order shall be limited 
to two or more definite existing railways, to be made only after 
a consideration of the particular case in the public interests, as 
well as of the interests of the companies directly concerned. 
The respondents cannot want — indeed, it would be obviously 
against their interests to want-*-the appellants’ railway thrown 



XXVI.] 



ONTARIO LAW REPORTS. 



235 



open to others and not to them: their need is, interchange be- 
tween their railway when built and that of the appellants, but 
only if that can be beneficially accomplished; and they ought 
not, merely to save themselves from the position of having failed 
altogether in their application, to catch at and try to hold on to 
something that does them no good, but harm, as well as grievously 
and needlessly hampering the appellants’ already overloaded 
railway. It is quite true that the applicants ought not to be 
delayed until the last spike of their construction is driven; but, 
on the other hand, it is. at least equally plain that they ought not 
to begin their application before the first spike is driven; it can 
hardly be that even the first spike constitutes a “ railway.” The 
pitiful picture painted by the Chairman, of waste in the dupli- 
cating of works, is almost, if not altogether, a fanciful one only; 
and one which, if there really could be anything in it, would not 
be got rid of, or even ameliorated, by the order in question, 
which gives nothing to the respondents; until the final agree- 
ment, or order, for interchange, should be made, there would 
be just as much uncertainty as there is now; an uncertainty 
which cannot really affect materially, if in any way, the mode 
of construction of the proposed railway. 

A much more real picture of that character might be drawn 
from a study of the effect of an unlimited order adding to the 
burden of already overcrowded cars, and overburdened rails, 
complaint, inconvenience, and bad feeling, as well as to the 
danger to life and limb which that burden already carries. 

There is obviously a vast difference, in this respect, between 
“steam” railways and street railways; to the former, with their 
comparatively infrequent trains and the matter of merely attach- 
ing other cars to them, the freest interchange is, generally speak- 
ing, manifestly in the public interests, as well as in the interests 
of all else concerned; between street railways, with already over- 
crowded rails, as well as cars, cars which are run separately, and 
when it may be practically necessary to send not only the car 
but also the crews of the one company over the lines of the others, 
a very different, and a much more difficult, problem arises, and 
one which can be fairly dealt with only when the railways are 
in existence and after the most careful consideration of all the 
then existing circunstances — circumstances which are changing, 



0. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 

Meredith, J.A. 



236 



ONTARIO LAW REPORTS. 



[VOL. 



0. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 

Meredith, J.A. 



in some respects, from time to time, and with especial regard to 
lesening rather than running any risk of increasing the already ter- 
rible toll of lost life and limb in street railway accidents. 

I can have no manner of doubt that, if the position of the 
parties were reversed, if the municipality were the owners and 
operators of the central system, and some private corporation 
were projecting the outlying railway, this particular application 
would be generally scoffed at. 

I am in favour of allowing the appeal, and discharging the 
order in question altogether. 



Magee, J.A.: — The by-law and orders of the Ontario Rail- 
way and Municipal Board under which the City of Toronto Cor- 
poration is acting were not before us on the argument, but were 
before that Board, or at least within its cognizance upon the 
city corporation’s application for the order now in appeal. A 
copy of by-law No. 5626, which will be referred to, has since been 
put in, and also a copy of the opinion of the Board, dated the 
23rd June, 1911, approving of the plans and profiles submitted 
by the city as to car lines on Gerrard street and Coxwell avenue 
and on St. Clair avenue. 



The appellants, the Toronto Railway Company, own and 
operate the street railway within what was formerly the city of 
Toronto, but new territory has since been added to the city, and 
the proposed street railways of the city or some of them are to 
be within the new territory. 

As a municipal corporation, the city would be enabled under 
sec. 569 of the Consolidated Municipal Act, 1903 (as amended 
in 1906 by 6 Edw. VII. ch. 34, sec. 21, and in 1910 by 10 Edw. 
VII. ch. 81, sec. 4), to pass, with the assent of the electors, a by- 
law for building, equipping, maintaining, and operating street 
railways along such streets and subject to and upon such terms 
as the Lieutenant-Governor in Council might approve, and for 
leasing the same from time to time, and for levying an annual 
special rate to defray the interest and principal of the expendi- 
ture. No other statutory authority is referred to as empowering 
the city to construct or operate a street railway. By the Ontario 
Railway and Municipal Board Act, 1906, 6 Edw. VII. ch. 31, 
sec. 53, that Board is given the powers of the Lieutenant-Governor 



XXVI.] 



ONTARIO LAW REPORTS. 



237 



in Council as to approval or confirmation of such by-laws. By 
the Ontario Railway Amendment Act, 1910 (10 Edw. VII. ch. 
81, sec. 3), a railway company shall not, without first obtaining 
the permission of the Board, begin the construction of a railway 
upon a highway, and this shall apply to a street railway; and by 
the Ontario Railway Act, 1906 (6 Edw. VII. ch. 30), sec. 2 (21), 
a “street railway” is declared to mean a railway constructed 
or operated along a highway under or by virtue of an agreement 
with or by-law of a city or town. Thus the Board’s approval of 
the by-law (or that of the Lieutenant-Governor in Council) would 
be necessary, and also the Board’s permission, before beginning 
the construction on the streets. 

A by-law was passed by the city council with a view to the 
construction of some street railway lines. In the Board’s reasons 
for the order, of the 24th June, 1911, now in appeal, it is stated 
that “the city submitted a by-law to the ratepayers to authorise 
the issue of debentures to the amount of $1,157,293, to pay for 
the construction and equipment of street railways upon certain 
streets to be selected by the council, with the approval of this 
Board. The by-law was carried by an overwhelming majority.” 
The Board then goes on to state: “On the 25th April last, the 
city made an application to the Board for the approval of the 
plans for the construction of the civic car lines on Gerrard street 
and Coxwell avenue from Greenwood avenue to Main street, 
and on St. Clair avenue from Yonge street to the Grand Trunk 
Railway crossing. The Board, in an opinion dated the 6th May, 
1911, declined to approve the plans and profiles until the city 
furnished us with particulars of the whole scheme for building, 
equipping, maintaining, and operating the civic car lines. We 
stated in that opinion that we required to know all the streets 
the city intended to use for the lines, the mileage, the kind of 
rail, the character of the construction, kind of car barns and 
repair shops, the number and kind of cars to be operated, and 
an estimate of the cost of construction, operation, and main- 
tenance, and of the revenue to be derived from the enterprise. 
The city have complied with this demand of the Board, and 
have furnished us with the required particulars and details of 
the scheme. The Board have approved of the plans and pro- * 
files and of the scheme generally. We are informed that the 



0. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 

Magee, J.A. 



238 

C. A. 
1912 

Re 

City of 
Toronto 

AND 

Toronto 
R.W. Co. 

Magee, J.A. 



ONTARIO LAW REPORTS. [vol. 

city have ordered the rails and other material necessary for the 
construction of the lines.” 

We find in the statutes of 1911 (1 Geo. V. ch. 119, sec. 8) 
that a city by-law No. 5626, passed on the 23rd January, 1911, 
for the raising of $1,157,293, the amount mentioned by the Board, 
was declared valid. 

In the letter of the 5th May, 1911, to the company’s manager, 
counsel for the city stated: “As you know, the different routes 
under contemplation by the city, and for which the by-law has 
been passed by the people, are as follows: (1) St. Clair avenue 
(2) Davenport road and Bathurst street 
(3) Rosedale loop ... (4) Danforth avenue . . . (5) 

Gerrard and Main street. . . .” The letter goes on to state 

the estimated cost of constructing a double track with an 80 lb. 
rail on each of these routes. 

So far as appears, by-law No. 5626 is the only by-law passed. 
It recites that by a report of the board of control, adopted in 
council, “ it is recommended that a by-law should be passed to pro- 
vide for the issue of debentures to the amount of $1,157,293 for the 
purpose of building and equipping street railways, and of laying 
permanent pavements upon the railway portions upon certain 
streets of the city;” and that the council had determined to issue 
debentures to that amount, “for the purpose of raising the amount 
required to pay for the construction and equipment of street rail- 
ways upon certain streets to be selected by the council, with the 
approval of the Ontario Railway and Municipal Board, in those 
parts of the city annexed thereto since September, 1891, and for the 
laying down of permanent pavements upon the railway portions of 
such streets.” The by-law then authorised the issue and sale of the 
debentures, “and the proceeds thereof . . . shall be applied 

for the purposes above specified, and for no other purpose.” 

It would thus appear that the by-law does not specify any street 
for the railway, but leaves that to future selection by the council. 
The issue of debentures is made valid by the statute, and no 
objection is taken here as to the validity or sufficiency of the by- 
law otherwise, or to the right of the city to proceed with the 
construction and operation of the proposed lines. Objection is 
made, however, that the mere right to construct, and even an 
authorised plan for construction, does not suffice for the applica- 
tion now in question. 



XXVI.] 



ONTARIO LAW REPORTS. 



239 



On the 5th June, 1911, the city gave the company notice of 
the application out of which this appeal arises, and the applica- 
tion was heard on the 21st June. No evidence was offered be- 
yond putting in some letters which had passed between the 
parties, each inviting proposals from the other. 

The permission of the Board for the construction had not 
been given when the application was heard. The information 
which the Board had required was received by it only on the 
previous day, the 20th June, and the company’s counsel was not 
aware that it had been furnished. The Board’s approval is dated 
the 23rd June. The order appealed from, though not dated, 
is stated to have been made on the 24th June. 

The city notified the company of its intention to apply to the 
Board for two things: an order to the company to afford all 
proper facilities for what may be called interchange of passenger 
traffic and cars between the company’s street railway and two 
of the city’s lines, namely, those on St. Clair avenue and Gerrard 
street; and an order that the company and their railway system 
shall be subject to and governed by the provisions of sec. 57 of 
the Ontario Railway Act, 1906. The Board did not grant the 
application for an order for interchange. It was hardly asked 
for, but recognised as premature, and indeed asserted by the 
city to be a matter for subsequent action. But the Board did 
make an order declaring that sec. 57 should apply to the company 
and its street railways, and also declaring that it should apply 
to the city corporation “and the street railways to be constructed 
by it.” The latter declaration had not been specifically asked 
for. 

The company appeal, on the ground that the Board had no 
jurisdiction to make such an order against them, at the instance 
of the city, or with a view to interchange with the non-existent 
city railways. 

The Ontario Railway Act, 1906 (6 Edw. VII. ch. 30), in sec. 
3, incorporates the Act with the special Act, and declares that it 
applies to “all persons, companies, railways (other than Govern- 
ment railways) and (when so expressed) to street railways within 
the legislative authority of the Legislature of Ontario;” but no 
section of the Act shall “apply to street railways unless it is so 
expressed and provided.” Section 5 is to the like effect. 



C. A. 
1912 

Re 

City of 
Toronto 

AND 

Toronto 
R.W. Co. 

Magee, J.A. 



240 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 

Magee, J.A. 



Section 57, in sub-sec. (1), provides that “the directors of any 
railway company may at any time, and from time to time, make 
and enter ' into any agreement or arrangement with any other 
company, either in this Province or elsewhere, for the regula- 
tion and interchange of traffic passing to and from the railways 
of the said companies, and for the working of the traffic over 
the said railways respectively, or for either of those objects 
. for any term not exceeding twenty-one years,” and 
to “provide . . . for the appointment of a joint committee 

or committees for the better carrying into effect such agreement 
or arrangement . . . subject to the consent of two-thirds 

of the shareholders, voting in person or by proxy.” Sub-section 
(2) provides that “every railway company shall . . afford 

all reasonable facilities to any other railway company for the 
receiving and forwarding and delivering of traffic upon and from 
the several railways belonging to or worked by such companies 
respectively, and for the return of carriages, trucks, and other 
vehicles;” and no such company is to give any preference or 
advantage to any particular company or description of traffic, 
or subject any to prejudice or disadvantage; and “every rail- 
way company having or working a railway which forms part 
of a continuous line of railway, or which intersects any other 
railway or which has a terminus, station or wharf of the one near 
a terminus, station or wharf of the other,” shall afford facilities 
for receiving and forwarding by the one all the traffic arriving 
by the other and so that no obstruction may be offered “in the 
using of such railway as a continuous line of communication.” 
Sub-section (3) imposes penalties on the employees of a “rail- 
way company” refusing or neglecting to receive, convey, or de- 
liver traffic from the railway of “any other company.” Sub- 
section (4) declares that “in case any company or municipality 
interested is unable to agree as to the regulation and interchange 
of traffic or in respect of any other matter in this section provided 
for, the same shall be determined by the Board.” And sub-sec. 
(5) reads: “All complaints made under this section shall be heard 
and determined by the Board.” If the section stopped there, it 
would not apply to street railways. But sub-sec. (6) is added, 
which declares that ‘ This section shall apply to such street rail- 
ways as may from time to time be determined by the Board.” 



XXVI.] 



ONTARIO LAW REPORTS. 



241 



The word “company,” in the expressions “any railway com- 
pany,” “every railway company,” and “any other railway com- 
pany,” used in sec. 57, is not, I think, governed by the inter- 
pretation given in sec. 2 to the expression “the company,” and 
should, therefore, be interpreted in its natural sense, and would 
not include a municipal corporation. And, as only companies 
are mentioned, it could not be intended that municipalities or 
their railways could be made subject to it. But then, it may 
be said, that, under sec. 569 of the Municipal Act, the munici- 
pality has the same rights, powers, and liabilities as street rail- 
ways and companies (which must mean all, not some, of such 
railways and companies) under the Street Railway Act (R.S.O. 
1897, ch. 208), which is now replaced and repealed by the Ontario 
Railway Act, 1906. By the Interpretation Act, R.S.O. 1897, 
ch. 1, sec. 8 (now 7 Edw. VII. ch. 2, sec. 7), the sections of the 
Ontario Railway Act, 1906, corresponding to those of the Street 
Railway Act, would be applicable. In the Street Railway Act 
and the amendments before 1906, there was no provision requiring 
interchange, though there was a right to agree to interchange. 
Section 57, apart from sub-sec. (6) , does not relate to street rail- 
ways at all, and even with sub-sec. (6) does not relate to all 
but only to some street railways — perhaps to none in the Province 
other than these two. It cannot then be said that sec. 569 makes 
interchange a right or liability of the municipality. The only 
view in which it might be claimed that the municipality would 
be made subject to sec. 57 is, that it is subject to the jurisdiction 
of the Board, and liable to have an order made by the Board 
under that section — but that is not, I think, in any sense, one 
of the “liabilities” contemplated by sec. 569. I am, therefore, 
of opinion that a municipality is not liable under sec. 57, any 
more than a Government railway, to be compelled to interchange 
traffic with any street railway or other railway company. I may 
here add that the use of the word “municipality” in sub-sec. (4) 
does not help a contrary view; it is manifestly used in respect 
of rights other than as proprietors of a railway, and its use there, 
as contradistinguished from “company,” when it is not used 
elsewhere in the section, rather supports the view that “company” 
does not include “municipality.” 

It is noticeable that sub-sec. (6) of sec. 57 uses the words “street 



C. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 

Magee, J.A. 



242 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Re 

City of 
Toronto 

AND 

Toronto 
R.W. Co. 

Magee, J.A. 



[VOL. 



railways.” “Street railway” is defined in sec. 2 (21) as meaning 
a railway “constructed or operated” along a highway, as already 
mentioned. Had sub-sec. (6) used the words “the company,” 
they are defined as meaning “the company or person” (which 
would, under the Interpretation Act, include “corporation”) 
“authorised by the special Act to construct.” The city’s street 
railway is authorised, but it is not yet commenced, much less 
constructed or operated. But, as the interchange of traffic could 
not take place till constructed and operated, I do not see that 
the Board must wait until that stage before making the declara- 
tion that sec. 57 shall apply to it, when constructed and operated. 
As pithily put by the Board, “that the proposed civic lines will 
be built is as certain as taxes.” The Board do not make such 
a declaration in the dark. As appears from the quotation above 
made from their reasons, they know the routes and the gauge, 
and sufficient particulars to enable them to judge whether it is 
proper that a particular street railway should be made liable to 
interchange at all. The Legislature has constituted the Board 
for the very purpose of exercising its discretion, and it is not to 
be assumed that the Board would in any case act in the dark or 
without full information on all points necessary for arriving at 
a decision. The liability to interchange is one thing, the terms 
of the interchange another. 

I have been dealing with the question of the power of the 
Board to determine that the city or its street railway shall be sub- 
ject to sec. 57. That it has such power with regard to the street 
railway of the appellant company is not disputed. That power 
it may exercise of its own motion or on the application of any 
one interested, and, under sec. 17 of the Ontario Railway and 
Municipal Board Act, it can decide conclusively who is a party 
interested; and I do not see anything in the Act to prevent the 
city corporation, owning or not owning a street railway, or a Board 
of Trade, or a body of merchants, or an individual, from being 
considered by the Board to be a party interested sufficiently to 
set the Board in motion if the Board did not choose to take action 
itself. 

Wejthen come to consider the order appealed from. It is 
in fact two orders combined in one. It is not an order that 
sec. 57^shall apply as between these two street railways, or^shall 



XXVI.] 



ONTARIO LAW REPORTS. 



243 



apply to each as regards the other. It contains an absolute and 
unlimited declaration that the section shall apply to the com- 
pany and its street railway. And then it contains an equally 
absolute and unlimited declaration as to the city and the “street 
railways to be constructed by it.” It is not restricted to those 
coterminous with the company’s railway nor to those on St. 
Clair avenue and Gerrard street, nor even to those to be con- 
structed under the existing by-law; but this appeal has no con- 
cern with any objection on that score. The effect is that, if 
sec. 57 is to apply to the company, it applies to it not merely to 
require interchange with the city’s street railway, but with all 
street railways, if not all railways of any sort to which sec. 57 
from time to time applies. 



C. A. 
1912 

Re 

City of 
Toronto 
and 

Toronto 
R.W. Co. 

Magee, J.A. 



That brings us again to consider sub-sec. 6. Several meanings 
may be put forward for it. One is that the Board may apply sec. 
57 not to one or more specified street railways, but to a class or 
to such as answer certain requirements. This order would not 
comply with that interpretation. Another meaning might be 
argued for — that the Board could apply sec. 57 not to any one or 
more certain specified street railways, but only as between two or 
more specified street railways — so that, in fact, it would not 
wholly apply to any one of them — that is, it would not apply to 
it as regards railways not mentioned. This order does not com- 
ply with that meaning. 

Then the only remaining construction, and the one which is, 
in my opinion, the correct one, is, that the Board may do what, 
if we could judge only by the formal order, it has done here, 
that is, decide whether or not sec. 57 shall apply to a particular 
railway, whatever the result may be. 

If the Board chooses to do that with regard to the street 
railway of the appellant company, or any other company to 
which the Ontario Railway Act applies, I do not see anything 
to prevent it. What the effect upon that company may be is 
another question. Does it become liable to interchange with 
all railways which are subject to sec. 57, or only with street 
railways? The section is to be construed not merely with refer- 
ence to Toronto alone, but with reference to the whole Province. 
There might well be places in which a street railway would be 
the only connecting link between two lines of steam railways, 



244 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Kb 

City of 
Toronto 
and 

Toronto 
K.W. Co. 

Magee, J.A. 



and in which it might be constructed with a view to being a con- 
necting link, as street railways are not limited to carriage of pas- 
sengers, and street railways continue to be street railways for a 
mile and a half outside the city or town. It might be to the public 
interest that such a street railway should be both entitled and 
liable to interchange with lines of steam railway. 

In my opinion, the Board cannot limit the application of 
sec. 57, if it declares that that section applies to the appellant 
street railway or any other. It cannot say how far that section 
shall apply, or that it shall apply only to a limited extent, or 
with regard to one railway or one street railway. 

If two companies to which the section applies are subsequently 
unable to agree, and the intervention of the Board becomes 
necessary, it may find interchange impracticable, and decline to 
make an order between them, or may have to require conditions 
which would not be acceptable to an applicant. But that is a 
different matter from assuming to exercise, under sub-sec. (6), 
the right to limit the application of the section. 

Although the order appealed from, in form, purports to be 
separate applications of sec. 57 to each of these street railways, 
it is not stated just what view the members of the Board took 
of the meaning of the sub-section. But in their reasons they in 
every instance couple the two roads together. For instance, 
it is stated: “The application is made by the city against the 
Toronto Railway Company for the purpose of securing an inter- 
change of traffic between the civic car lines and the company's 
street railway system, and with that view to have it declared 
that sec. 57 of the Ontario Railway Act of 1906 applies to the 
company and the city street railway . . . We do not think 

we require to wait until the last spike is driven before deter- 
mining that sec. 57 . . . shall apply to the city’s and the 

company’s street railways. To do so would result in useless 
and wasteful duplication . . . There should be an inter- 

change of traffic; and, therefore, we make the determination 
asked for by the city.” The Board also expressed its opinion 
that it would be in the public interest, when the city had com- 
pleted and equipped the railway, to arrange for its operation 
with the present street railway as one system. Nowhere does 



XXVI.] 



ONTARIO LAW REPORTS. 



245 



the Board deal with the propriety of making sec. 57 applicable 
to any one road alone. 

It is, I think, evident that, although the city had only asked 
for the application of sec. 57 to the company’s street railway, 
the Board was not considering the application of the section to 
either railway apart from the other — and was making the declar- 
ation only with respect to the company’s railway, because it 
was also making a similar declaration with regard to the city’s 
railway. The reasons of the Board for its decision are signed by 
all the members, and are before this Court, and it is evident 
that, if the city was not to be liable to interchange, no order would 
have been made in respect of the company alone, and that the 
order was only made for the purpose of interchange between these 
two railways. Taking, as I do, the view that the Board could 
not apply sec. 57 to the city railways, it follows, I think, that, 
although the order with respect to the company’s railways would, 
if it stood alone, be quite within the powers of the Board, yet, 
being made upon a non-existent basis, and with a view to an 
impossible result, and made without consideration of its effect 
upon the company with regard to any other railway or street 
railway, it was not warranted in law and should be declared 
invalid. 

Whether, in view of the provisions of sec. 21 of the Ontario 
Railway and Municipal Board Act, 1906 (6 Edw. VII. ch. 31), 
restricting the Board’s power to interfere with a company’s 
rights or duties under an agreement, any practical beneficial 
result would be attained by the application of sec. 57 of the 
Ontario Railway Act, may give rise to serious consideration. The 
Board have a very desirable end in view, and it is to be hoped 
that the good sense and public spirit of both parties will lead them 
to it. 



C. A. 
1912 

Ru 

City of 
Toronto 

AND 

Toronto 
R.W. Co. 

Magee, J.A. 



Appeal allowed. 



246 



ONTARIO LAW REPORTS. 



1912 
April 16 



[MIDDLETON, J.] 
Livingston v. Livingston. 



[vol. 



Partnership — Account — Profits of Separate Business Carried on by one 
Partner — Assent of other Partner — “ Competing ” Business — Sale of 
Property of Firm after Death of one Partner — Purchase by Trustee for 
Surviving Partner — Adequacy of Price — Liability to Account for 
Profits on Resale — Allowance to Surviving Partner for Services in 
Liquidation — Trustee Act, sec. 40 — Trustee — Express Trustee. 



One of two members of a partnership carrying on business in Ontario 
was interested as a partner in a similar business carried on in Michi- 
gan:— 

Held, that the irresistible inference from the facts in evidence was, that 
what was done by the one partner was done with the assent and ap- 
proval of the other; and, therefore, the rule of law laid down by Lind- 
ley, L.J., in Aas v. Benham, [1891] 2 Ch. 244, 255, “that if a partner 
without the consent of his copartners carries on a business of the same 
nature as, and competing with, that of the firm, he must account for 
and pay over to the firm all profits made by him in that business,” 
had no application. 

Quaere, whether the Michigan business was a “competing” business, with- 
in the meaning of the rule. 

Held, also, that the finding of a Referee upon a reference for the taking of 
the accounts of the partnership, after the death of one of the partners, . 
that the sale of an oil mill owned by the firm to a brother-in-law of 
the defendant (the surviving partner), was provident, and the price 
realised was as much as the mill was worth, was well warranted by 
the evidence. 

Held, also, upon the evidence, affirming the finding of the Referee, that 
the surviving partner was, in truth, the purchaser, and that his brother- 
in-law was a mere trustee for him. 

Held, however, in this reversing the conclusion of the Referee, that the 
defendant was not liable to account for profits realised when the oil 
mill was afterwards sold with the other assets of a company formed to 
carry on an oil business, to which the mill was turned over; he was 
liable to account for the real value of the property which he had 
improperly purchased; but that was the extent of his liability; and 
the finding that the property sold for its full value was conclusive. 
Held, also, reversing the finding of the Referee, that the defendant was 
not entitled to an allowance for his services in connection with the 
liquidation of the partnership. 

Section 40 of the Trustee Act, R.S.O. 1897, ch. 129, applies only to ex- 
press trustees; and, semble, a surviving partner is not a trustee at 
all. 

An appeal by the defendant and a cross-appeal by the plain- 
tiffs from the report of George Kappele, K.C., an Official Re- 
feree, dated the 7th December, 1910, upon a reference for taking 
the accounts of a partnership which formerly existed between 
John Livingston and James Livingston. John Livingston died 
in 1896; and this action was brought by his representatives 
against James. 



ONTARIO LAW REPORTS. 



247 



XXVI. 



March 15 and 18. The appeal and cross-appeal were heard 
by Middleton, J., in the Weekly Court at Toronto. 

7. F. Hellmuth, K.C., and J. 77. Moss, K.C., for the de- 
fendant. 

Wallace Nesbitt, K.C., and H. S. Osier, K.C., for the plain- 
tiffs. 



April 16. Middleton, J. : — The facts are fully set forth in 
the very elaborate and careful report of the learned Referee, 
and I do not need to set them forth at length. Three distinct 
matters were argued, and those require to be separately dealt 
with. 

In 1856, the late John Livingston and James Livingston 
came to Canada — young men — without any capital, and through- 
out their lives worked together as partners. From very small 
beginnings their business prospered, until, at the death of John, 
the elder brother, in 1896, their joint property amounted to 
more than half a million dollars. During all this time, the 
brothers appear to have had perfect confidence in each other, 
and each seems to have accorded to the other the greatest 
liberty in respect to the assets of the firm. There do not 
appear to have been any of the restrictions that would usually 
have existed in the case of a partnership. Each brother was 
practically allowed to do as he pleased. If he wanted money, 
he took it, and it was charged to him. There was no fixed capi- 
tal. Each brother took what he needed, and what was left was 
used for the purposes of the business. 

In the course of time, new problems arose. Some members 
of the family were taken into the business. Ultimately, when 
McColl, a son-in-law of James, and Peter Livingston, a nephew, 
in 1887 desired to be taken into the business, James came to the 
conclusion that it was inadvisable to introduce into the concern 
any more relatives, and he told these young men to endeavour to 
establish a business for themselves in Michigan, and that he 
would assist them. It appears that John was asked to join in 
this, but declined. Finally an arrangement was come to between 
the two young men and James, by which they formed a partner- 
ship to operate at Yale, Michigan; and there is no doubt that 
James was the financial backer of this business. He desired to 



Middleton, J. 

1912 

Livingston 

v. 

Livingston. 



248 



ONTARIO LAW REPORTS. 



Middleton, J. 

1912 

Livingston 

v. 

Livingston. 



fvOL. 



open a separate bank account for its financing; and, at the 
suggestion of the local bank manager, he opened a special 
account — “J. & J. Livingston Special.” This was for the pur- 
pose of avoiding any discussion with the bank’s head office. 

This business was carried on in Michigan for nine years 
before John’s death, and from small beginnings grew to be a 
very substantial affair. There was no secrecy in connection 
with it. It had many dealings with the firm of J. & J. Living- 
ston; and, when the United States tariff was changed so as to 
make it unprofitable for certain branches to be carried on from 
Canada, some business formerly done by the Canadian firm 
appears to have been substantially transferred to the American 
firm. 

Annual statements were prepared by the accountant, and 
were submitted to J ohn Livingston. In none of these statements 
was the Michigan business treated as being an asset of the 
Canadian firm. No objection whatever was ever taken by John; 
in fact, from the beginning of the whole matter, each brother 
seems to have been entirely content to abide by the actions of 
the other. 

After the death of John, those claiming under him appear to 
have felt themselves aggrieved by the dilatoriness of James in 
the winding-up of the partnership ; and in 1901 an action for 
the dissolution of the partnership was brought. This action has 
dragged on to the present time. 

In 1902, by consent, a judgment for a dissolution was pro- 
nounced, in the ordinary form, save for the reservation to J ames 
of the right to make a claim to be remunerated for his services 
in connection with the liquidation. When the accounts were 
brought in under this judgment by the defendant, a surcharge 
was filed, claiming, among other things, that this Yale business 
was an asset of the firm. 

The other members of the Yale firm were not before the 
Court ; yet both the Master to whom the matter was originally 
referred, and the learned Referee, have, in the absence of the 
other members, assumed to deal with the question of ownership. 
The learned Referee has found that the business is and 
always was a separate business, and that it was not owned by 
the partnership ; and no appeal has been had from this decision. 



XXVI.] 



ONTARIO LAW REPORTS. 



249 



The Referee has, however, found that the facts bring the case 
within the rule of law laid down by Lindley, L.J., in Aas v. 
Benham, [1891] 2 Ch. 244, 255: “It is clear law that every part- 
ner must account to the firm for every benefit derived by him 
without the consent of his co-partners from any transaction con- 
cerning the partnership or from any use by him of the part- 
nership property, name or business connection. . . . It is 

equally clear that if a partner without the consent of his co- 
partners carries on a business of the same nature as, and com- 
peting with, that of the firm, he must account for and pay over 
to the firm all profits made by him in that business.” 

Upon that assumption, he has directed the defendant to bring 
into the partnership accounts all the profits received by him from 
the Yale business; and I understand this ruling to include not 
merely the profits which have actually been divided, but profits 
which have gone to increase the capital of that concern. 

Upon the argument before me it was admitted that this was 
too wide, and that James’s liability, if any, to account, must be 
taken to have terminated upon the dissolution of the Canadian 
firm by the death of his brother John. 

With great respect for the learned Referee, and realising 
the advantage he had in hearing some portion of the evidence, 
I find myself unable to agree with him. I think the irresistible 
inference from the facts is, that what was done by James was 
done with the assent and approval of John ; and that, therefore, 
the rule has no application. 

The case in this aspect is singularly like Kelly v. Kelly 
(1911), 20 Man. L.R. 579, decided since the learned Referee’s 
report. 

Had I not come to this conclusion, I would have hesitated 
long before determining that this business was a competing busi- 
ness within the rule in question. When the business was estab- 
lished, the intention undoubtedly was to locate the young men 
far from home, where the business would not compete. They 
were to go to another country, and earn their own experience, 
and to establish an independent business for themselves; James 
became a partner in the Yale business for the purpose of re- 
munerating him for his advice and counsel, and above all for his 
financial assistance. None of the cases upon competing business 



Middleton, J. 

1912 

Livingston 

v. 

Livingston. 



17 — XXVI. O.L.R. 



250 



ONTARIO LAW REPORTS. 



Middleton, J. 

1912 

Livingston 

v. 

Livingston. 



[vol. 

at all resemble this; and, when the relationship which existed 
between the brothers is borne in mind, it seems, to me at least, 
that the case is very far removed from the facts of the cases 
which have given rise to the rule. 

Upon the argument, the Wurth-Hairst business was men- 
tioned as forming the subject of a separate ground of appeal. 
This was not argued in detail, as I was told that my decision in 
connection with the Yale business would govern it. 

The second ground of appeal is in connection with an oil 
mill owned by the firm. After the dissolution and after the 
parties were at arms’ length and represented by separate solici- 
tors, negotiations took place between James Livingston and the 
representatives of John for the purchase of this mill. James 
offered $45,000. This was at first accepted, but the acceptance 
was withdrawn. The property was then offered for sale, and was 
purchased by one Erbach, brother-in-law of James, .for $38,500. 
This sale was attacked before the Referee as being a sale at an 
undervaluation; but the Referee found, upon the evidence, that 
the sale was provident, and the price realised was as much as the 
mill was worth. This finding is well warranted by the evidence. 
The valuation obtained on behalf of John’s representatives, of 
something over $48,000, was accompanied by the statement 
that no such price could be realised at a sale, but that it repre- 
sented the actual value of the machinery as a running concern, 
and that the value placed on the buildings could not be realised, 
because, apart from the oil business — for which the buildings 
were adapted — they had no utility. 

This sale was further attacked upon the ground that James 
Livingston was, in truth, himself the purchaser, and that 
Erbach was a mere trustee for him; and the Referee has so 
found. A company was incorporated shortly after the pur- 
chase, and the property was turned over to it; and this com- 
pany has, in its turn, sold to the Dominion Oil Company. The 
whole transaction was financed upon James Livingston’s credit; 
and neither the purchaser nor any of the shareholders of the 
company had ever put any money into the concern. I do not 
think it was open to the Referee to inquire into the title of the 
purchasers, in their absence. The company, although the crea- 
tion of James Livingston, and in one sense almost identical with 



XXVI.] 



ONTARIO LAW REPORTS. 



251 



him, was still a legal entity, and conld not be deprived of its 
property in its absence; but James Livingston can be made to 
account, upon a proper basis if he has been guilty of any wrong- 
doing. 

Upon the appeal before me it was argued that the Referee’s 
finding of fact was not correct. No doubt, the finding is 
opposed to the oath of all those concerned; but actions fre- 
quently speak louder than words; and the conclusion appears 
to me irresistible that Livingston was, in truth, the purchaser. 

I was urged to find that the correct inference from the evi- 
dence is, that Livingston was not the purchaser at the sale ; that 
Erbach was not a trustee for him; but that, after the contract 
had ceased to be executory, Livingston had purchased from 
Erbach. The difficulty is, that there is no evidence to support 
this contention, and that it is quite opposed to what is stated by 
every one. It was suggested that to find otherwise would be to 
impute some improper conduct or some ignorance of the law to 
the late Mr. Barwick. It do not think it is necessary to do this. 
I think it extremely unlikely that Mr. Barwick knew the facts. 
Livingston, no doubt, was advised, and, no doubt, knew, that he 
could not buy directly or indirectly; but, nevertheless, I think 
that Erbach did buy for him; and everything that has taken 
place subsequently is consistent only with this view. 

But I cannot at all agree with the consequences the Referee 
has attributed to this finding of fact. He says that the defend- 
ant must account to the estate for what was received by the 
James Livingston Linseed Oil Company when it went into the 
oil merger and transferred its property to the Dominion Linseed 
Oil Company. 

I do not think that this is the result. Before the transaction 
was attacked, Erbach had conveyed the property to the James 
Livingston company. Its title has not been impeached. This 
transfer was at the same purchase-price, and merely involved 
the assumption of the liability to pay the $38,500 to the estate ; 
so there was then no profit. Nevertheless, Livingston would be 
liable to account for the real value of the property which he had 
improperly purchased; but it has been found that the property 
sold for its full value, and this finding has not been appealed 
from; and I think this ends his liability. 



Middleton, J. 

1912 

Livingston 

v. 

Livingston. 



252 



ONTARIO LAW REPORTS. 



Middleton, J, 

1912 

Livingston 

v. 

Livingston. 



[VOL. 



The consequences of the Referee’s findings appear to be 
most serious. The James Livingston Linseed Oil Company -car- 
ried on business for years. The buildings and machinery formed 
a very small part of its real assets. It was, as a going concern, 
transferred — probably at a fictitious price — to the Dominion 
company; and it would be an extraordinary thing if the result 
should be that the estate should receive much more than the 
buildings and machinery were worth, and much more than these 
buildings and machinery cost or could be duplicated for. The 
question involved somewhat resembles that discussed in Lindley 
on Partnership, 7th ed., p. 634, concerning the liability of 
partners who carry on a partnership business, after their dis- 
solution, and the profits made arise, not so much from the part- 
nership assets which are used, as from the skill, industry, and 
ability of the surviving partners. 

The question of the measure of damages of a trustee who 
becomes himself a purchaser is dealt with in the Divisional 
Court in the case of Atkinson v. Casserley (1910), 22 O.L.R. 527. 

The third question is the propriety of the allowance made by 
the Referee to the defendant for his services in connection with 
the liquidation of the partnership. No doubt, the defendant 
has rendered great services to the partnership ; and, as a matter 
of fairness and equity, his services ought to be remunerated; 
but I fear that the law is against his claim. In England it is well 
settled, though I have been unable to find any case indicating 
the precise ground upon which such a claim is disallowed. It 
may be because of the nature of the partnership contract; or it 
may be because in England trustees render their services gra- 
tuitously, unless it is otherwise expressly provided in the trust- 
deed. More probably there has never been any exact state- 
ment of the reason for the rule, because no English lawyer 
would think of placing the right of a surviving partner higher 
than the right of a trustee. 

I can find no trace of any such allowance having been made 
in Ontario. The right, if it exists, must be based upon the 
Trustee Act. For convenience I refer to the Act in the revision 
of 1897, ch. 129, which in this respect is similar to the Act of 
1887, which probably applies. The sections dealing with this 
matter are 40 et seq. Section 40 provides that “any trustee 



XXVI.] 



ONTARIO LAW REPORTS. 



253 



under a deed, settlement or will ... or any other trustee, 
howsoever the trust is created,” shall be entitled to an allow- 
ance. These words, it seems to me, apply only to express 
trustees; and this impression is strengthened by reference to 
sec. 27, which provides that the expression “ trustee,” in the 
next five sections of the Act, includes “a trustee whose trust 
arises by construction or implication of law, as well as an express 
trustee.” So, even if a surviving partner could be regarded as 
a trustee, he would not he within the provision of the statute 
relating to remuneration. 

Besides this, there is authority for the statement that a sur- 
viving partner is not a trustee at all: Knox v. Gye (1872), L.R. 
5 H.L. 656. His position, no doubt, imposes certain obligations 
and duties which are in their nature fiduciary; but it is not 
every one who is subjected to these obligations and restraints 
who can claim to be a trustee and entitled to all the privileges 
of a trustee. A wider construction has been adopted in the 
interpretation of the statutory provision corresponding with 
sec. 27 : see In re Lands Allotment Co., [1894] 1 Ch. 616, at p. 
632; but I am precluded from applying this reasoning to the 
case in hand because of the view I entertain that sec. 40 applies 
only to express trustees. 

The result is, that both appeal and cross-appeal succeed to 
the extent indicated; and, as success is divided, there should 
be no costs. 



Middleton, J. 

1912 

Livingston 

v. 

Livingston. 



18 — XXVI. O.L.R. 



254 



ONTARIO LAW REPORTS. 



[VOL. 



[MEREDITH, C.J.C.P.] 

1912 
April 17 



It is ultra vires of a company incorporated under the Ontario Companies 
Act, R.S.O. 1897, ch. 191, to issue shares at a discount; and held, that 
the respondent, who had paid for five shares and was allotted by the 
company seven and a half shares described as fully paid-up (the extra 
shares being regarded as paid for by services rendered in promoting 
the company), and had acquiesced and acted as a holder of seven and 
a half shares, was not entitled, upon the ground of mistake, to be re- 
lieved from his position as a shareholder in respect of the extra two 
and a half shares; and a resolution of the shareholders, “that all stock 
certificates which have been regarded in the light of bonus stock be 
recalled into the company,” and what was done under it, namely, the 
Cancellation of the respondent’s certificate for seven and a half shares 
and the issue of a new certificate to him for five fully paid-up shares, 
were ultra vires of the company; and the respondent was liable, upon 
the winding-up of the company, as a contributory in respect of two un- 
paid shares — not two and a half, because there is no warrant in the 
Act to allot anything less than a share, and the respondent’s liability 
did not extend to the half share. 

Sections 10, 33, and 37 of the Ontario Companies Act, R.S.O. 1897, ch. 
191, considered. 

Review and application of cases under the English Companies Acts. 

Ooregum Gold Mining Go. of India V. Roper, [1892] A.C. 125, specially re- 
ferred to. 

The mistake of the respondent was not a mistake of fact, but a mistake as 
to the law. 

Re Cornwall Furniture Co. (1910), 20 O.L.R. 520, followed. 



Re McGill Chair Co. 

Munro's Case. 

Company — Winding-up — Contributory — Shares Issued at a Discount as fully 
Paid-up — Ultra Vires — Liability of Allottee — Mistake of Law — Repu- 
diation — Cancellation of Allotment — Resolution of Shareholders — 
Ultra Vires — Ontario Companies Act , R.S.O. 1897, ch. 191, secs. 10, 
33, 37 — Allottee Treated as Shareholder — Knowledge and Acquies- 
ence — Allotment of Half Share — Liability. 



An appeal by the liquidator of the company from an order 
of the Local Master at Cornwall, dated the 12th 'September, 
1911, refusing to settle the name of Munro, the respondent, on 
the list of contributories in respect of two shares and one half- 
share of the capital stock of the company, upon a reference for 
winding-up under the Dominion Winding-up Act. 



November 20, 1911. The appeal was heard by Meredith, 
C.J.C.P., in the Weekly Court at Toronto. 

George 'Wilkie, for the liquidator. 

J. A. Macintosh, for the respondent. 

April 17, 1912. Meredith, C.J. : — The facts, as far as 
they are material to the question for decision, are undisputed, 



XXVI.] ONTARIO LAW REPORTS. 

and are: that the respondent was asked by McGill, a director 
of the company, to subscribe for shares, and was promised seven 
and a half fully paid-up shares of $100 each, for $500; and he 
was advised by Pitts, another director, to do so. The respondent 
agreed to take the shares on these terms, and accordingly sub- 
scribed for them and paid the $500, receiving on the 16th Janu- 
ary, 1907, a stock certificate describing the shares as fully paid- 
up. 

This transaction was not an isolated one; for, as I under- 
stand, all the shares issued by the company were subscribed for 
and allotted on the same terms. 

All parties acted in good faith and under the belief that 
the transaction was one into which the company might lawfully 
enter. 

A resolution of the directors had been passed on the 31st 
October, 1906, “that services in connection with the promotion 
and organisation of the McGill Chair Company be paid for in 
fully paid-up shares of the stock of the company, and that certi- 
ficates be issued for the same.” 

Instead of allotting bonus shares to the persons who had 
rendered the services mentioned in the resolution, the plan was 
adopted of giving to each person who subscribed for shares 
three shares for every two for which he paid, or at that rate; 
the additional fifty per cent, being provided by the shares the 
issue of which was authorised by the resolution. 

Although this was the plan adopted, Munro was treated in 
the books of the company as having subscribed for five shares, 
and paid for them with the $500, and as holding two and a 
half shares paid for by “services rendered in connection with 
promoting this company.” 

The respondent, on the 24th April, 1908, gave a proxy to Mr. 
Campbell to vote for him at a shareholders’ meeting to be held 
on the 27th of that month, and in it he described himself as the 
holder of seven and a half shares; and the respondent himself 
attended two of such meetings. 

In January, 1910, the company, as the learned Master puts 
it, was in deep water financially. 

Some of the shareholders, to whom shares had been allotted 



255 

Meredith, C..T. 

1912 

Re 

McGill 
Chair Co. 
Munro’s 
Case. 



256 



ONTARIO LAW REPORTS. 



[VOL. 



Meredith, C.J. 

1912 

Re 

McGill 
Chair Co. 
Munro’s 
Case. 



on similar terms to those on which the respondent’s shares were 
allotted to him, had, about a year before this, learned of the 
illegality of the transaction, and demanded that the certificates 
which had been issued to them should be cancelled and new 
certificates issued for the shares for which they had fully paid 
in cash. These demands and occasional threats of legal pro- 
ceedings to enforce them continued during the year preceding 
the passing of the resolution to which I shall next refer. 

On the 14th January, 1910, at a meeting of the shareholders 
it was resolved : ‘ ‘ That all stock certificates which have been re- 
garded in the light of bonus stock be recalled into the company, 
and whereas Thomas McGill performed special services in con- 
nection with the promotion of the company is desirous of 
retaining his stock that he may be exempt from the above 
resolution. ’ 9 

The respondent made no separate demand to have his bonus 
shares cancelled, but he was present at this meeting and voted 
in favour of the resolution. 



In pursuance of this resolution, the stock certificates, except 
McGill’s, were called in and cancelled, and on the 22nd Janu- 
ary, 1910, a new certificate was issued to the respondent for 
five fully paid-up shares. 

In the view of the Master, the respondent, in accepting the 
seven and a half shares, acted under a mistake of fact; and, 
having repudiated the bonus shares, as the Master found, as soon 
as he became aware of. the mistake, he was entitled to have the 
allotment of them cancelled, as was done. 

The mistake under which, as the Master thought, the re- 
spondent acted was in believing that the seven and a half shares 
were, as they were represented to be, fully paid-up. 



I am unable to agree with this view. The mistake of the 
respondent was not, in my opinion, a mistake of fact, but a 
mistake as to the law. 



It is not like the case of Burkinshaw v. Nicolls (1878), 3 App. 
Cas. 1004, where the company was held to be estopped from 
alleging that the shares were not fully paid-up, by the certificate 
which it had issued, and on the faith of which a third person 
had purchased the shares from the person described in the certi- 



XXVI.] 



ONTARIO LAW REPORTS. 



257 



ficate as being the owner of them, stating that they were fully 
paid-up. 

The respondent dealt directly with the company, and knew 
that he was purchasing from it shares that had not been issued 
to any one else, but were being issued then for the first time; 
and the mistake under which he laboured was the belief that the 
company had a right to issue shares to him at a discount of one- 
third of their face value, for that was the effect of the trans- 
action. 

The position of the respondent is well described by what was 
said by Bowen, L.J., in Ex p. Sandy s (1889), 42 Ch. D. 98, 117. 
The defendant in that case sought to have the register rectified 
by striking out her name in respect of six hundred and seventy- 
three shares issued at a discount, and the money she had paid 
in respect of them repaid to her. ‘ ‘ The question, ’ ’ said the Lord 
Justice, “is, whether the respondent, whose name is upon the 
register, has agreed to become a member. The original contract 
under which she applied for shares was not one that, as long as 
it rested in fieri , could have been enforced. She applied for 
shares to be given to her coupled with a condition which the law 
would not recognise, and the company had no right, disregard- 
ing the condition, to force upon her something which she had 
not asked for. If the case stood there, there would have been 
an end of the matter. The original contract was not one which 
could have been enforced, and in giving her the shares without 
attaching the condition to them, which she made a portion of 
her offer, the company were not giving her what she asked for. 
But the matter does not rest there, and this is just the point 
of the case. After her name was placed on the register and 
after she knew that her name was on the register, she did cer- 
tain acts which were only consistent with an intention on her 
part to be treated as a member of the company, and to treat 
herself as a member of the company in respect of these particu- 
lar shares which had been so appropriated to her. If that is not 
evidence of an agreement to be a member, I really do not know 
what is.” Lindley, L.J., in the same case (p. 115), says: “There 
never has been from the beginning to the end any mistake on 
her part about the facts. Such a mistake as there has been was 
a mistake by her, if any, as to the legal effect of what she has 



Meredith, C.J. 

1912 



Re 

McGill 
Chair Co. 
Munro’s 
Case. 



258 



ONTARIO LAW REPORTS. 



Meredith, C.J. 

1912 

Re 

McGill 
Chair Co. 
Munro’s 
Case. 



[VOL. 



done. She has not taken these shares on the theory or supposi- 
tion that they were in fact paid-np to the full extent of £5. 
She knew all the time that they were not paid-np, and were 
never intended to be paid-np. No doubt she thought, not know- 
ing the law, that she never would have to pay the- balance. . . 
Now the moment she gets these shares and finds she is on the 
register, what does she do? Does she repudiate? Assume she 
might, but does she? Quite the reverse; being still in ignor- 
ance, as she says, of hex rights — not in ignorance of any material 
fact, but being still in ignorance, or under an erroneous impres- 
sion as to the legal effect of what she is about — she treats her- 
self as a shareholder in respect of these shares.” And Cotton, 
L.J., points out (p. 113) that there was in the case what was 
wanting in In re Almada and Tirito Co. (1888), 38 Ch. D. 415, 
namely, the assent of the shareholder to her name being on the 
register in respect of the shares; and he distinguished Beck’s 
Case (1874), L.R. 9 Ch. 392, saying that “the mistake on which 
the applicant was there relying was not a mistake in law, but a 
mistake in fact;” and, after a reference to the facts of that 
case, he added: “If there had been a mistake of the general 
law of the country, he could not have been relieved. But what 
the Lords Justices held was, that he was entitled to have his 
name struck off the register because he had been put on under 
a contract entered by him under a mistake in fact, of which he 
was entitled to have the benefit.” 

In Welton v. Saffery, [1897] A.C. 299, the shares had been 
issued at a discount, and it was held that the holders of them 
were not released from liability in a winding-up to calls for the 
amount unpaid on their shares, for the adjustment of the rights 
of the contributories inter se, as well as for the payment of the 
company’s debts and the costs of winding-up. Speaking of the 
nature of the transaction, Lord Macnaghten said (pp. 321-2) : 
“The truth is, as it seems to me, that there never was a contract 
between the company or the shareholders, on the one hand, and 
the persons to whom these discount share were offered, on the 
other. There was an offer by the directors purporting to act on 
behalf of the company, but it was an offer of that which the 
company could not give, because the law does not allow it. 
There was an acceptance by the discount shareholders of that 



XXVI. 



ONTARIO LAW REPORTS. 



259 



offer. But that offer and acceptance could not constitute a 
contract. Both parties acted under a misconception of law, and 
the whole thing was void. The company, however, placed the 
names of the discount shareholders on the register ; they allowed 
their names to remain there until their remedy against the com- 
pany was gone; and now they cannot be heard to say that they 
were not shareholders.” 

Ex p. Sandy s was followed by Britton, J., in Be Cormvall 
Furniture Co. (1910), 20 O.L.R. 520, and his decision was 
affirmed by the Court of Appeal. The question in that case 
was as to the position of persons to whom bonus shares had been 
isued; and, dealing with it, the Chief Justice of Ontario said 
(p. 533) : “It is now too late for these persons to ask to be re- 
lieved from their position as holders of the shares which they 
thus acquired. No doubt, they acted under a mistaken belief, 
but that fact does not suffice to entitle them to be relieved. 
Having assented to the allocation of the shares and accepted the 
position of holders in respect of them, they cannot be relieved 
from the liability attached to the position simply because they 
made a mistake in the general law. There is no question that 
the facts were fully known to them.” 

In the Cornwall case, the question arose after an order for a 
winding-up of the company had been made ; and I refer to it 
only for the purpose of shewing that a mistake such as that 
under which the respondent laboured is a mistake as to the law, 
and not a mistake as to facts. 

In the English cases it will have been noticed that the 
assent of the shareholder to his name appearing on the register 
of shareholders is spoken of as the determining factor for 
fixing him with liability as a shareholder; and in the case at 
bar there is nothing to shew that the respondent knew that his 
name had been entered in the register as the holder of the seven 
and a half shares. That circumstance is not, in my opinion, 
material, as the real determining factor is his knowledge that 
the company treated him as a shareholder and his acquiescence 
in being so treated, and that I take to have been the opinion 
of the Chief Justice of Ontario, judging from his observations in 
the Cormvall case which I have quoted — “Having assented to 



Meredith, C.J. 

1912 

Re 

McGill 
Chair Co.. 
Munro’s. 
Case. 



260 



Meredith, C.J. 

1912 

Re 

McGill 
Chair Co, 
Mtjnro’s 
Case. 



ONTARIO LAW REPORTS. [vol. 

the allocation of the shares and accepted the position of holders 
in respect of them, they cannot be relieved. . . ” 

The Act nnder which the company was incorporated, the 
Ontario Companies Act, R.S.O. 1897, ch. 191, contains no pro- 
vision similar to sec. 25 of the English Companies Act of 1867, 
which provides that every share “ shall be deemed and taken 
to have been issued and to be held subject to the payment of 
the whole amount thereof in cash, unless the same shall have 
been otherwise determined by contract duly made in writing, 
and filed with the Registrar of Joint Stock Companies at or 
before the issue of such shares.” 

It is clear, however, from Ooregum Gold Mining Co. of 
India v. Roper, [1892] A.C. 125, that, apart altogether from the 
provisions of sec. 25, the issue of shares at a discount is ultra 
vires a company whose capital is divided into shares of a fixed 
amount, and the liability of the shareholders of which is limited 
to the amount unpaid on their shares. See the observations of 
the Lord Chancellor (p. 134), Lord Watson (pp. 135-6), Lord 
Macnaghten (p. 145), and Lord Morris (p. 148). See also 
Welt on v. Saffery, supra. 

There is, in my opinion, no reason why these and similar 
cases should not be applicable to companies incorporated under 
the law of Ontario. 

The Ontario Companies Act, R.S.O. 1897, ch. 191, requires 
that the number of the shares and the amount of each share 
shall be stated in the application for incorporation (sec. 10) ; 
and sec. 33 provides that “not less than ten per centum upon 
the allotted shares of stock of the company shall, by means of 
one or more calls formally made, be called in and made payable 
within one year from the incorporation of the company; the 
residue when and as the by-laws of the company direct;” and, 
although there is no express provision limiting the liability of 
shareholders to the amount unpaid on their shares, sec. 37, im- 
pliedly at all events, so limits it; and the constitution of a 
company incorporated under that Act possesses, therefore, both 
of the features which led to the conclusion that it was idtra 
vires of a company incorporated under the English Act of 1867 
to issue shares at a discount; and in the reported cases in this 
Province the English decisions have been applied, uotwith- 



XXVI.] 



ONTARIO LAW REPORTS. 



261 



standing the absence of any provision in onr Companies Acts 
similar to sec. 25 of the English Companies Act. 

For these reasons, I am of opinion that the respondent was 
not entitled, npon the ground of mistake, to be relieved from his 
position of shareholder in respect of the two and half shares; 
and it follows, I think, that the resolution of the 14th January, 
1910, and what was done under it, was ultra vires the company. 

In the Ooregum case the Lord Chancellor (at p. 133) said: 
“It seems to me that the system thus” (i.e., by the Companies 
Act) “created by which the shareholder’s liability is to be 
limited by the amount unpaid upon his shares, renders it impos- 
sible for the company to depart from that requirement, and 
by any expedient to arrange with their shareholders that they 
shall not be liable for the amount unpaid on the shares, although 
the amount of those shares has been, in accordance with the Act 
of Parliament, fixed at a certain sum of money. It is manifest 
that if the company could do so the provision in question would 
operate nothing. I observe in the argument it has been sought 
to draw a distinction between the nominal capital and the capital 
which is assumed to be the real capital. I can find no auth- 
ority for such a distinction. The capital is fixed and certain, 
and every creditor of the company is entitled to look to that 
capital as his security.” 

In Bellerby v. Roivland & Marwood’s Steamship Co., [1902] 
2 Ch. 14, the Master of the Rolls, quoting this passage from 
the speech of the Lord Chancellor, added (p. 26) : “And the 
opinions of the other learned Lords are to the same effect. The 
justification of forfeitures rests upon the statute itself, and I 
think that since- Trevor v. Whitworth (1887), 12 App. Cas. 409, 
no authority can be relied on as justifying a surrender having 
the effect of reducing capital which cannot be supported as a 
form of forfeiture.” Stirling, L.J., in the same case (p. 29), 
expressed the opinion that ‘ 1 the weight of authority is in favour 
of the view that forfeiture, which is specifically mentioned in 
the Act of 1862, stands on a special footing, and that surrenders 
can only be supported in circumstances which would justify 
forfeiture.” Cozens-Hardy, L.J. (p. 31), dealing with the same 
question, says: “When, however, the transaction involves, as in 



Meredith, C.J. 

1912 

Re 

McGill 
Chair Co. 
Munro’s 
Case. 



262 



ONTARIO LAW REPORTS. 



Meredith, C.J. 

1912 

Re 

McGill 
Chair Co. 
Munro’s 
Case. 



[VOL. 



the present case, the release by the company to the shareholder 
of uncalled capital on their shares it seems to me that it is, 
within Trevor v. Whitworth, a reduction of capital not sanc- 
tioned by law. The decision of the House of Lords in the 
Ooregum case, that shares in a limited company cannot be 
issued at a discount, involves the principle, that the company 
cannot be any device relieve a shareholder from the liability 
to pay the full amount due on his shares. This would be the 
result, if the shares had been retained by the plaintiffs, instead 
of being surrendered to the company. But the fact that in 
consideration of the release the shares were surrendered seems 
to me to render the transaction no better. Uncalled capital is 
part of the assets of the company. . . . The company, there- 
fore, parted with £415, a portion of its assets, in consideration 
of the acquisition of the shares. This was a purchase of the 
shares, and is directly within the authority of Trevor v. Whit- 
worth 

I do not understand how half a share came to be allotted. I 
find no warrant in the Act to allot anything less than a share, 
and I do not think that the liability which, I hold, attached to 
the respondent, extends to the half share which the company 
assumed to allot to him. This point was not taken on the 
argument, and counsel may speak to it if the appellant con- 
tends otherwise ; and, subject to this, an order will issue allowing 
the appeal and substituting for the order of the Local Master 
an order that the name of the respondent be put upon the list 
of contributories in respect of two shares. 

There will be no costs of the appeal or of the application to 
the Local Master. 

Since writing the foregoing, my attention has been called to 
a recent decision of my brother Middleton, Re Matthew Guy 
Carriage and Automobile Co., Thomas’s Case (1912), 3 O.W.N. 
902, which, it is said, is opposed to the view I have expressed as 
to the effect of the resolution to cancel the shares and the 
action taken upon it. I find, however, on inquiry from my 
learned brother, that it is not, and that in that case the contract 
to take the shares was still executory at the time the resolution 
to cancel the bonus shares was passed. 

[Leave to appeal to the Court of Appeal from the above decision was 
granted by Middleton, J., on the 27th May, 1912 : see 3 O.W.N. 1326.] 



XXVI.] 



ONTARIO LAW REPORTS. 



263 



[IN CHAMBERS.] 

Rex ex rel. Morton v. Roberts. 
Rex ex rel. Morton v. Rymal. 



1912 

April 16 



Municipal Elections — Township Councillor and Deputy Reeve — Qualifica- 
tion — Transfers of Qualifying Properties after Election — Right to 
Hold Seats — Qualification as Mortgagees — Defect in Declarations — - 
Right to Make Fresh Declarations — Consolidated Municipal Act, 1903, 
secs. 76, .219, 220, 311 — Procedure in Attacking Right to Hold Seats — 
Notice of Motion in Nature of Quo Warranto — Time — Amendment. 

The respondents were declared elected councillor and deputy reeve respect- 
ively of a township. Both had been assessed as freeholders, and were 
admittedly qualified at the time of the election. The councillor elect 
made an absolute conveyance of his qualifying property, delivered and 
registered before the 8th January, on which day he made a declaration 
of qualification purporting to be in pursuance of sec. 311 of the Con- 
solidated Municipal Act, 1903, and took his seat as councillor. The 
declaration omitted the word “and” between the words “have” and 
“had” in the third line of the form in the statute, sec. 311 — thus reading 
“I hame had to my own use and benefit ... at the time of my 
election . . . such an estate as does qualify me,” etc. The deputy 
reeve elect also disposed of his only qualifying property; but this oc- 
curred after he made the declaration and took his seat. The declar- 
ation was in the same defective form. The councillor elect took as 
part of the purchase-money of his property a mortgage thereon for 
$4,100, and the deputy reeve elect took a mortgage in the same way for 
$4,500: — 

Held, that the statute lays down three prerequisites to a de jure occupa- 
tion of the office: (1) possession of property qualification; (2) election 
by acclamation or otherwise; (3) making the declaration prescribed; 
and absence of any one of these will prevent the seat being filled de 
jure. 

And held, that the declarations made by the respondents were not in the 
form nor to .the same effect as the form prescribed by the statute; and 
neither respondent was de jure a member of the council. 

Held , also, that the relator had the right to proceed by notice of motion 
in the nature of a quo warranto, under secs. :219 and 220 of the Muni- 
cipal Act, 1903, to attack the right of the respondents to hold their 
seats. 

Held, also, that, as the facts in regard to the transfers of the properties 
and the form of the declaration came to the knowledge of the relator 
only within six weeks of the application, he was in time under the 
amendment made to sec. 220 of the Act of 1903, by 7 Edw. VII. ch. 
40, sec. 5. 

Held, also, that the notices of motion should be amended by setting up 
the omission to make the statutory declaration. 

Held, also, that, if the respondents could now make the declaration re- 
quired by sec. 311 of the Act,- they should be allowed to do so, and so 
make their occupancy of the offices de jure. 

Regina ex rel. Clancy V. Conway (1881), 46 U.C.R. 85, followed. 

Held, also, that the respondents, as mortgagees holding the legal estate in 
the lands which they had conveyed, although not mortgagees in posses- 
sion, had the qualification required by sec. 76 of the Consolidated Muni- 
cipal Act, 1903 — there is nothing in principle or authority to prevent 
a mortgagee who is assessed for the property qualifying on his legal 
estate. 

History of the legislation and review of the authorities. 



264 



ONTARIO LAW REPORTS. 



[VOL. 



Riddell, J. 



1912 

Rex 

EX REL. 

Morton 

v. 

Roberts. 



Appeals by the respondents from orders of the Junior Judge 
of the County Court of the County of Wentworth declaring that 
the respondents had lost the right to hold their seats as coun- 
cillor and deputy reeve respectively for the township of Barton, 
having become disqualified since their election to those offices. 

April 9. The appeals were heard by Riddell, J., in 
Chambers. 

J. G. Farmer, K.C., for the respondent Roberts. 

A. M. Lewis, for the respondent Rymal. 

W. A. H. Duff, K.C., for the relator. 



April 16. Riddell, J. • — At the recent municipal election in the 
township of Barton, such a number of nominations were made as 
would apparently necessitate a taking of votes ; but at the pro- 
per time, a sufficient number resigned (Consolidated Muni- 
cipal Act, 1903, sec. 129 (2), (3)) to enable the clerk (sec. 129 
(4)) to declare the remaining candidates duly elected. Accord- 
ingly, Roberts was declared elected councillor and Rymal deputy 
reeve. 

Roberts had been assessed as freeholder on a certain lot, and 
was admittedly “ qualified” at the time of the election. He, 
however, by deed dated the 5th January, registered on the 6th 
January, conveyed the land by deed absolute to one McDonald, 
having on the 1st January taken a mortgage for $4,100. Not- 
withstanding this transfer, he made a declaration of qualifica- 
tion purporting to be in pursuance of sec. 311 of the Act and 
amending statutes, on the 8th January, and upon that day took 
his seat as councillor, and still continues to hold it. 

The declaration omitted the word “and” between the words 
“have” and “had” in the third line of the form in the statute, 
sec. 311.* 

Upon motion before His Honour Judge Monck, that learned 
Judge made an order declaring “that the said Walter Roberts 
hath lost his right to hold his seat as a councillor of the township 
of Barton, and hath become disqualified since his election to hold 
his said seat, he having since his said election sold and disposed 
of the property on which he qualified, and not being otherwise 



* “. . . have and had to my own use and benefit ... at the time of 
my election to the office . . . such an estate as does qualify me to act 

in the office ” 



XXVI.] 



ONTARIO LAW REPORTS. 



265 



qualified or possessing the necessary qualification required by 
the Consolidated Municipal Act, 1903, and amendments thereto, 
and said seat is vacant. ’ ’ 

Rymal had also been assessed for certain property, and ad- 
mitted was duly ‘ 4 qualified ’ ’ at the time of the election ; hut he 
also conveyed his property by deed of date the 28th December, 
affidavit of execution the 6th January, registered the 23rd Janu- 
ary, on which day the transaction was completed by Rymal 
taking a mortgage for $4,500 for part of the purchase-money 
and handing over the deed. 

The learned Judge says of this transaction : “ Rymal also dis- 
posed of his only qualifying property, but this occurred after 
he took the oath of qualification and after he took his seat.” 
Rymal made, on the 8th January, a declaration in the 
same defective form as that made by Roberts, and took his seat 
as deputy reeve, and still claims it. A motion before Judge 
Monck resulted in a similar order — each respondent was ordered 
to pay costs. 

Both Roberts and Rymal now appeal. 

The learned Judge proceeded on the ground that the pro- 
perty qualification of a member of a municipal council was a 
continuing qualification; and that, once the property qualifica- 
tion originally necessary was lost, the incumbent of the office 
became ipso facto disqualified. 

In the view I take of the case, I do not think I need pass 
upon that question. It is, however, to be observed that from 
almost the very earliest times the qualification has been express- 
ed to be that entitling a person “to be elected.” 

The first general Act (1838), 1 Viet. ch. 21, providing for 
the election of certain officers — clerk, assessor, collector, etc.— has 
no qualification for the officer to be elected, although it has for 
the voter (secs. 2, 4). 

The Municipal Act of 1841, 4 & 5 Viet. eh. 10, sec. 11, pro- 
vides that “every person to be elected a member of a District 
Council . . . shall be seized and possessed,” etc., etc. 

Baldwin’s Act, 12 Viet. ch. 81, secs. 22, 57, 65, 83, contains 
the same language; the Act of 1858, 22 Viet. (stat. 1) ch. 99, 
which is the same as (1859) C.S.U.C. ch. 54, sec. 70, also; and the 



Riddell, J. 

1912 



Rex 

EX EEL. 

Morton 

v. 

Roberts. 



266 



ONTARIO LAW REPORTS. 



Riddell, J. 

1912 

Rex 

EX REL. 

Morton 

v. 

Roberts. 



[VOL. 



terminology appears in the various amendments and re-enact- 
ment down to the present Act of 1903, sec. 76. Sometimes, 
indeed, the provision is negative, as at present, and sometimes 
positive, as was the original form — but, whether it be ‘‘no per- 
son but,” or “every person who,” it is always “to be elected.” 

Language quite different was used almost from the first in 
respect of certain cases. It is true that in the Act 4 & 5 Viet, 
ch. 10 it was provided (sec. 12) that “no person ... in Holy 
Orders or . . . Minister ... of any religious sect . . 

nor any Judge . . shall be qualified to be elected a councillor 

. . ;” but the language was soon changed. In the Act of 
1849, by sec. 132, it was enacted “that no Judge . . . and no 
person having . . . any interest ... in any contract with 
. . . the Township . . . shall be qualified to be or be elected 
. . . councillor . . .” And in Baldwin’s Act, C.S.U.C. 

ch. 54, sec. 73, it is provided that such person shall not be 
qualified “to be a member of the Council of the Corporation.” 
The same language continues down to the present Act, sec. 80 

And, in like manner, the Act of 1849, sec. 112, provides 
that, if any member of a municipal council ‘ ‘ be declared a bank- 
rupt ... or shall compound by deed with his creditors, then 
. . . such person shall . . . immediately become disquali- 

fied, and shall cease to he a member of such municipal corpora- 
tion . . and the vacancy thereby created . . . filled as in 
the case of the natural death of such member . . .” In the 

C.S.U.C. ch. 54, sec. 121, the occasions for the seat becoming 
vacant are increased in number, introducing amongst others ‘ ‘ as- 
signs his property for the benefit of creditors” — and so it has 
continued to the present time (Consolidated Municipal Act, 
1903, sec. 207), appearing in substantially the same words in the 
nine or ten re-enactments and amendments. 

The difference in the terminology affords a very cogent argu- 
ment against the view that the Legislature intended the sale 
of the qualifying property to operate as an act ipso facto dis- 
qualifying the member, at all events after proper declaration 
of qualification made — had that been the intention, it is difficult 
to see why the provision that an assignment for the benefit of 



XXVI.] 



ONTARIO LAW REPORTS. 



267 



his creditors is made specifically a ground of disqualification, 
without the addition “a sale or assignment of qualifying pro- 
perty. ’ ’ 

So in the Act of 12 Viet. ch. 81, sec. 110, it is provided that 
the absence of the head of the council “vacates” the seat. 

On the other hand, a consideration of the form of the oath or 
declaration affords a strong argument that the ownership of the 
property qualification must continue — at all events until the oath 
or declaration was made. And this will appear during the 
consideration of the forms laid down, which I shall speak of in 
another point of view. For I do not intend to decide these cases 
upon the ground taken by the County Court Judge. 

From a very early period it has been a statutory require- 
ment that a councillor, etc., should make a declaration (or take 
an oath). The Act of 1838 provides for a promissory oath, and 
it was to be made (secs. 9, 36) within twenty days of being noti- 
fied of election, upon penalty of a fine of £5. But the Act of 
1841 contained a provision “that no person elected a councillor 
. . . shall be capable of acting as such until he shall have taken 
and subscribed” the statutory oath — and he was given (sec. 16) 
ten days after notice of his election to take this oath, otherwise 
he was deemed to have refused the office, and was liable to a fine 
— his office was deemed vacant and a new election had. The oath 
is not only promissory (sec. 15), but also “that I am seized and 
possessed, to my own use, of lands,” etc., and that such “lands 
are within the District of . . . and are of the real value of 

£300,” etc., etc. The Baldwin Act, 12 Viet. ch. 81, provides (sec. 
129), “that every person who shall be elected ... to any 
office which requires a qualification of property . . . shall, 

before he shall enter into the duties of his office, take and sub- 
scribe an oath or affirmation to the effect following, fhat is to 
say: ‘I, A. B., do swear . . . that I am truly and bond fide 

seized to my own use and benefit of such an estate (specifying it) 
as doth qualify me to act in the office of (naming it) . . . 

according to the true intent and meaning of a certain Act of 
Parliament,’ ” etc., etc.. Note that in these earliest qualifi- 
cation oaths the present tense is used in speaking of the owner- 



Riddell, J. 

1912 

Rex 

EX EEL. 

Morton 

v. 

Roberts. 



268 

Riddell, J. 

1912 

Rex 
ex REL. 
Mortox 

V. 

Roberts. 



ONTARIO LAW REPORTS. [vol. 

ship, and also (in 12 Yict.) that the ownership of the estate doth 
qualify to act in the office. 

The language in 22 Yict. (stat. 1) ch. 99, sec. 175, is, “before 
he . . . enters on his duties . . ;” and the declaration (a 

solemn declaration now being substituted for an oath) is still, 
“lam truly and loud fide seized . . . doth qualify me to act 
in the office,” etc. 

The statute 29 & 30 Yict. ch. 51, sec. 178, makes no change 
from the language of the Consolidated Statute — the Act of 1873, 
36 Yict. ch. 48, sec. 211, brings in the form still in use — “have 
and had to my own use and benefit ... as proprietor . . . 
at the time of my election to the office of . . . does qualify 
me to act . . . ” — precisely the same as the form in the 
statute of 1903, sec. 311 (the word “proprietor” being used in- 
stead of “owner”), but without the addition made by (1906) 6 
Edw. VII. ch. 34, sec. 10. 

The statute, in my view, lays down three prerequisites to a 
de jure occupation of the office (I do not pause to inquire as 
to others) : (1) possession of property qualification; (2) election 
by acclamation or otherwise; (3) making the declaration pre- 
scribed. Absence of any one of these will prevent the seat being 
filled de jure — absence of one or all will not, of course, prevent 
it being filled de facto. 

“Where the statute requires a prescribed oath of office before 
any person elected 1 shall act therein / a person cannot- justify 
as such officer unless he has taken an oath in substantial, not 
necessarily literal, compliance with the law:” Dillon on Muni- 
cipal Corporations, 5th ed., sec. 395, and American cases cited 
in note 1, at bottom of p. 680. 

In The King v. Swyer (1830), 10 B. & C. 486, the capital 
burgesses and common council of Shafton were authorised to 
elect one of the burgesses each year to be mayor. The charter 
provided that “he who . . . shall be elected . . . mayor 

. . . before he be admitted to execute that office, or in any 

way to intermeddle in "the same office, shall . . . take . . . 
all the oaths by the laws . . . appointed . . . and that 
after such oath so taken, he can and may execute the office of 
. . . mayor . . .” Lord Tenterden, C.J. (p. 491) : “A party 



XXVI.] 



ONTARIO LAW REPORTS. 



269 



becomes mayor not merely by reason of his being elected, but 
of being sworn into office.” Bayley, J. (pp. 491, 492) : “By the 
clause authorising the election of a mayor, the capital burgesses 
are to elect and nominate one of the burgesses to be mayor : and 
he, before he executes his office, is to be sworn in. He becomes 
the head of the corporation not when he is elected and nomin- 
ated, but when he is sworn in.” It will be seen that no point is 
made of the clause in the charter that ‘ ‘ after s*uch oath so taken, 
he can and may execute the office of . . . mayor,” which is 

the only point of differentiation between the Shafton charter 
and our statute in that regard. 

In The King v. Mayor, etc., of Winchester (1837), 7 A. & E. 
215, the language of the statutes (9 Geo. IV. ch. 17, secs. 2, 4, and 
5, and 5 & 6 Wm. IV. ch. 76, sec. 50) is a little different, but not 
substantially so — and Lord Denman, C.J. (p. 221), clearly shews 
that it is the making of the declaration that constitutes the 
acceptance of the office. See also per Littledale, J., at p. 222. 

In a case under our own statute, upon language identical 
with that in the present statute, Cameron, J. (afterwards Sir 
Matthew Cameron, C.J.), said: “I am of opinion that until a 
person elected a member of a municipal corporation has made 
the declaration of qualification prescribed by the 265th section 
of ch. 174, RjS.O. 1877, he has no right to exercise or dis- 
charge the functions pertaining to the office : ’ ’ Regina ex rel. 
Clancy v. St. Jean (1881), 46 U.C.R. 77, at p. 81. On p. 81 the 
learned- Judge continues: “I think there can be no doubt that 
this declaration is an essential prerequisite to the discharge of 
the duties of the office of alderman. ’ ’ In the case of Regina ex 
rel. Clancy v. Conway (1881), 46 U.C.R. 85, at p. 86, the same 
learned Judge gave (in a certain event, which will be considered 
later) leave to file an information in the nature of a quo ivar- 
ranto, “on the ground that without making the declaration of 
qualification he (Conway) illegally exercises the franchises of 
the office.” 

Such cases as United States v. Bradley (1836), 10 Peters 343, 
are quite different, as they determine only that an appointment 
in the nomination of the President, upon confirmation by the 
Senate of the United States, becomes an absolute appointment, 



Riddell, J. 

1912 

Rex 

ex REL. 
Morton 

v. 

Roberts. 



19 — XXVI. O.L.R. 



270 



ONTARIO LAW REPORTS. 



Riddell, J. 

1912 

Rex 

EX REL. 

Morton 

v. 

Roberts. 



[VOL. 

vesting the office in the nominee upon appointment by the Presi- 
dent and confirmation by the Senate, although the nominee has 
not given the bond which a statute requires him to give for the 
security of the Government. Compare. United States Bank v. 
Dandridge (1827), 12 Wheat. 64. 

It can scarcely be seriously argued that the declaration taken 
is “to the effect” of the form in the statute. As we have seen, 
the earliest form of declaration of qualification was in the oath 
in sec. 129 of the Act of 12 Yict. : “I am truly and bond fide,” 
etc.; and this continued until the Act of 1873. At that time it 
seems to have been considered proper to make sure that the 
declarant had been, at the time of the election, properly quali- 
fied — 'and not simply was possessed of the property qualifica- 
tion at the time of the declaration. It might happen that one 
not really having the property qualification would offer himself 
for election, and, if elected, buy property for his qualification. 
But from the very first the present tense is found somewhere in 
the oath — and it is wholly absurd to suggest or argue that declar- 
ing. “I have had property,” etc., is to the same effect as declar- 
ing, “I have and had property,” etc. 

It must be held that neither respondent is de jure a member 
of the council. 

We have next to consider whether the present procedure is 
open to the relator — and two strong cases at first sight seem ad- 
verse; but I think the apparent difficulty will disappear when 
the course of the legislation is examined. In Regina ex rel. 
Grayson v. Bell (1865), 1 U.C.L.J. N.S. 130, it was alleged that 
the candidate’s declaration was not proper, but that it set out 
property of which in fact he was not the owner. Hagarty, J. 
(afterwards Sir John Hagarty, C.J.O.), refused a writ of sum- 
mons in the nature of a quo warranto . 

So, also, in Regina ex rel.. Hoisted v. Ferris (1870), 6 U.'C. 
L.J. N.S. 266, Mr. Dalton, C.C. & P., refused to unseat Perris, 
on the ground alleged that the declaration made by him was 
insufficient, saying: “Nothing can be made of this objection on 
this application. Whatever might be the effect of the omission 
to describe the nature of the estate on a quo warranto at common 
law, it affords no ground for declaring, in this statutory pro- 



XXVI.] 



ONTARIO LAW REPORTS. 



271 



ceeding, that the election was not legal, or was not conducted 
according to law, or that the person declared elected thereat 
was not duly elected. ’ ’ 

The common law writ of quo warranto — sometimes called 
quo jure — was used by the King to call upon any subject who 
exercised office or a franchise, to shew by what authority the 
office or franchise was enjoyed — it might also be used by the 
King to call upon one who held land, to shew by what title or 
warrant he held. The right to such a writ rested, of course, upon 
the principles that the King has the sole power of bestowing 
offices and franchises and he is lord paramount of all land within 
the kingdom. The writ, which was an original writ out of 
Chancery, fell into disuse early, probably in the times of Richard 
II. (Coke, 2 Inst. 498, etc.), and an information in the nature of 
a quo warranto took its place. This was much abused in Stewart 
times, but has survived; and still may be put in action in a 
proper case — it lies against persons who claim any office, fran- 
chise, or privilege of a public nature, and not merely ministerial 
and held at the will and pleasure of others : Darley v. The Queen 
(1845), 12 Cl. & F. 520. 

As it was held that at the common law the King alone 
could have such an information against those usurping offices, 
etc., in municipal corporations, the statute 9 Anne ch. 20 was 
passed, providing for the issue of such informations at the in- 
stance of private prosecutors in such cases — and this statute 
became part of our law by the Provincial Act, 32 Geo. III. ch. 1. 

Both in England and in Upper Canada, the practice in such 
cases has been simplified : the statutory provisions are in cases 
covered by the statutes now taken advantage of — but, if there be 
any casus omissus, the information under the Statute of Anne 
may be still appealed to. In our own Courts, the most recent 
case I know of is Regina ex rel. Moore v. Nagle (1894), 24 O.R. 
507. Askew v. Manning (1876), 38 U.C.R. 345, is another case. 

By the Act of 12 Viet. ch. 81, sec. 146, it was provided “that 
at the instance of any relator having an interest as a candidate 
or voter in any election ... a writ of summons, in the nature 
of a quo warranto, shall lie to try the validity of such election, 
which writ shall issue out of His Majesty’s Court of Queen’s 



Riddell, J. 

1912 



Rex 

EX REL. 

Morton 

v. 

Roberts. 



272 

Riddell, J. 

1912 



Rex 

EX REL. 

Morton 

v. 

Roberts. 



ONTARIO LAW REPORTS. [vol. 

Bench . . . upon such relator shewing upon affidavit . . . 
reasonable grounds for supposing that such election was not 
conducted according to law, or that the party elected or returned 
thereat was not duly or legally elected or returned.’ ’ Thence- 
forward, the writ of summons was used instead of the informa- 
tion in the nature of a quo warranto in cases to which it was 
applicable. 



When the case Regina ex rel. Grayson v. Bell , 1 U.C.L.J. N.S. 
130, was decided (in 1865), the statute in force was the C.S.U.C. 
1859, ch. 54, which provided (sec. 128 (1)) that, “If . . . the 
relator shews by affidavit to any such Judge, reasonable grounds 
for supposing that the election was not legal or was not con- 
ducted according to law, or that the person declared elected 
thereat was not duly elected . . . the Judge shall direct a 

writ of summons in the nature of a quo warranto to be issued to 
try the matters contested.” The only matters which could be 
thus contested were (sec. 127), “the right of any municipality to 
a reeve or deputy reeve, or . . . the validity of the election or 
appointment of a mayor, warden, reeve, deputy reeve, aider- 
man, councilman, councillor or police trustee.” It is in view 
of the provisions of the then existing statute that Hagarty, J., 
says: “As Bell was properly qualified, and nothing is alleged 
against the manner of his election, I do not see how I can inter- 
fere by quo warranto , because an apparent mistake” [the re- 
port by a clerical error reads “no apparent mistake”] “has been 
made in the description of the nature of an estate in pro- 
perty. . . .” 



In 1870, when Regina ex rel. Hoisted v. Ferris, 6 U.C.L.J. 
N.S. 266, was decided, the Act in force was (1866) 29 & 30 Yict. 
ch. 51 ; the provisions for a writ of summons in the nature of 
a quo warranto, and the description of the matters that could be 
tried under such a writ, are totidem verbis et Uteris the same as 
in the C.S.U.C. : see 29 & 30 Yict. ch. 51, secs. 130, 131. 

The statute 36 Yict. ch. 48, secs. 131, 132, was the same, and 
also R.S.O. 1877, ch. 174, secs. 179, 180, which last contained the 
statutory enactments when the two cases of Regina ex rel. Clancy 
v. St. Jean and Regina ex rel. Clancy v. Conway, 46 U.C.R. 77, 
85, came on. And it was due to the limited class of cases for the 



XXVI.] 



ONTARIO LAW REPORTS. 



273 



application of the statutory procedure that iu these cases an 
information, and not a writ of summons in the nature of a quo 
warranto, was applied for. 

In 1892, by sec. 188 of the statute 55 Yict. ch. 42, a notice of 
motion in the nature of a quo warranto was substituted for a 
writ of summons : and this practice has continued to the present 
time; the statute 60 Yict. ch. 15, schedule C (44), struck out in 
the beginning all reference to the right of a municipality to a 
reeve or deputy reeve; and 3 Edw. YII. ch. 18, sec. 32, made 
a most important change: “In case the validity of the election 
or the appointment or the right to hold the seat of a mayor, 
warden, reeve, alderman, county councillor or councillor is 
contested,” etc. etc. Before that time it was only the validity 
of the election which could be challenged in the statutory method 
—thereafter the right to hold a seat could be attacked in the 
same way. Section 33 made a corresponding change in the 
material to be presented to the Judge upon application in the 
first instance. The consolidation of 1903, 3 Edw. YII. ch. 19, 
sec. 219, followed, and that Act has been slightly amended by 6 
Edw. YII. ch. 35, sec. 26, and 9 Edw. YII. ch. 73, sec. 5 (1). 

The scope of the statutory remedy being extended to cover 
the case of a contest as to a deputy reeve’s and a councillor’s 
right to sit, there can be no doubt that the practice followed 
here is proper. 

It would seem that the facts, as to the transfer of the pro- 
perty, and I suppose the form of the declaration, came to the 
knowledge of the relator only within six weeks of the applica- 
tion ; and, consequently, he is in time under the amendment made 
to sec. 220 of the Consolidated Municipal Act, 1903, by the stat- 
ute of 1907, 7 Edw. YII. ch. 40, sec. 5. 

The form of notice of motion is : “ Take notice that by leave 
of His Honour Judge Monck, Junior Judge of the County Court 
of the County of Wentworth, a motion will be made on behalf 
of the above named John E. Morton, of the township of Barton, 
in the county of Wentworth, dairyman, and an elector entitled 
to vote at a municipal election in the said township of Barton, 
before the presiding Judge in Chambers, at .the court house in 
the city of Hamilton, on the 8th day after the day of service 



Riddell, J. 



1912 

Rex 

EX REL. 
Morton 
v. 

Roberts. 



274 



ONTARIO LAW REPORTS. 



[VOL. 



Riddell, J. 

1912 



Rex 

ex REL. 

Morton 

v. 

Roberts. 



of this notice on yon (excluding the day of service), at the hour 
of eleven o’clock in the forenoon, or so soon thereafter as the 
motion can be heard, for an order declaring that the said Frank 
E. Rymal, the above-named defendant, hath lost his right to 
hold his seat as deputy reeve of the township of Barton, and 
has become disqualified since his election to hold his said seat, 
he having since his said election sold and disposed of the pro- 
perty on which he qualified, and not being otherwise qualified' or 
possessing the necessary property qualification required by the 
Consolidated Municipal Act, 1903, and amendments thereto.” 



The statute provides (sec. 221 (2)) that “the relator shall, 
in his notice of motion, . . . state specifically, under distinct 

heads, all the grounds of objection to the validity of the 
election complained against, and in favour of the validity of 
the election of the relator, or other person or persons, where 
the relator claims that he or they, or any of them, have been 
duly elected, on the grounds of forfeiture or disqualification, 
as the case may he.” This is from 3 Edw. VII. ch. 19, sec. 221, 
and makes no reference to a case in which the validity of the 
election is not complained of and no claim is made for the 
election of some one else — as in the present case. Accordingly, 
I think the notice of motion may he amended by setting up the 
omission to make the statutory declaration. Section 226 does 
not apply for the same reason — or, if it be considered that the 
first part applies on the mutatis mutandis principle, so does the 
second — and I think it eminently a case where “the Judge in 
his discretion” should “entertain any substantial ground of 
objection to” the right to hold the seat. 

The mere fact that a proper declaration has not been made 
does not in itself compel the Court to declare the seat vacant. 
In Regina ex rel. Clancy v. Conway, 46 U.C.R. 85, Cameron, 
J., gave leave to the defendant to make the same within ten 
days, if he could; and he says in the other case, 46 U.C.R. at p. 
82: “As the latter” ( i.e the person elected) “can at any time 
put himself in a position to exercise the franchises of the office 
by making a proper declaration, his omission to make the de- 
claration would not render the office vacant.” This was a case 
of an imperfect declaration. 



XXVI.] 



ONTARIO LAW REPORTS. 



275 



The form of the declaration contemplates that the declarant 
shall have, at the time of making* the declaration, the qualifica- 
tion : no Court would allow a person to make a declaration 
which was false and so commit an indictable offence : Criminal 
Code, sec. 175. And, of course, no one with any sense of self- 
respect would desire to make a false declaration. 

Prom very early times the refusal to make the declaration 
was held equivalent to a refusal of the office, even if the party 
was incapable of making it: Attorney -General v. Read (1678), 
2 Mod. 299; Starr v. Mayor, etc., of Exeter (1683), 3 Lev. 116; 
affirming S. C., 2 Show. 158; Rex v. Larwood (1693), Carthew 
306. 

« 

If the elected can now make the declaration required by sec. 
311, then, under Regina ex rel. Clancy v. Conway, ut supra , 
they should be allowed to do so, and so make their occupancy of 
the offices de jure, as it is now de facto. 

The position of a mortgagee is well understood : he has the 
legal estate in the land, holding the legal estate and the land 
as security for his debt. Is this legal estate sufficient? 

The early statutes do not employ the terminology now in use. 

In 1 Yict. eh. 21, there is no qualification prescribed : but in 
4 & 5 Viet. eh. 10, sec. 11, one to be elected must “be seized and 
possessed to his own use, in fee, of lands and tenements within 
the district ... of the real value of £300 currency, over and 
above all charges and incumbrances due and payable upon or 
out of the same.” Under 12 Yict. eh. 81, sec. 22, no one could 
be elected township councillor “who shall not have been entered 
upon the . . . roll as assessed for ratable real property held 

in his own right ... as proprietor or tenant, to the value 
of £100 . . ;” and under sec. 57 no one could be elected a 

village councillor “who shall not be possessed, to his own use, of 
real estate held by him in fee or freehold, or for a term of 
twenty-one years or upwards ... of the assessed value of' 
£250 . . Section 65 contains language similar to that of 
sec. 57 ; while sec. 83 provides for the qualification of an aider- 
man — “seized, to his own use, of real estate held by him in fee 
simple, or in freehold . . of the assessed value of £500 . 

In 1858, 22 Yict. (stat. 1) ch. 99, sec. 70, a change was made — 



Riddell, J. 

1912 

Rex 

EX REL. 

Morton 

v. 

Roberts. 



276 



ONTARIO LAW REPORTS. 



Riddell, J. 

1912 

Rex 

EX REL. 

Morton 

V. 

Roberts. 



[VOL. 

“have ... in their own right or in the right of their wives, 
as proprietors or tenants, freehold or leasehold property rated 
. . . to at least the value . . .” 

By the last Act before Confederation, 29 & 30 Viet. ch. 51, 
sec. 70, another change was made — “have ... in their own 
right or in the right of their wives, as proprietors or tenants, a 
legal or equitable freehold or leasehold, rated . . .” There 

must have been some reason for introducing the expression 
“legal or equitable.” * 

In the consolidation of 1873, 36 Viet. ch. 48, sec. 71, another 
change was made — “have ... in their own right, or in the 
right of their wives, as proprietors or tenants, a legal or equit- 
able freehold or leasehold, or partly legal and partly equitable, 
rated . . .” This language is unaltered in R.S.O. 1877, ch. 
174, sec. 70: 46 Viet. ch. 18, sec. 73; but 49 Viet. ch. 37, sec. 2, 
changes it to “legal or equitable freehold or leasehold, or partly 
freehold and partly leasehold, or partly legal and partly equit- 
able;” and this reappears in 50 Viet. ch. 29, sec. 2, R.S.O. 1887, 
ch. 184, sec. 73; 55 Viet. ch. 42, sec. 73. The revisers in 1897, 
under the powers given by 60 Viet. ch. 3, sec. 3, changed the 
wording into its present form; and the Legislature adopted it 
as R.S.O. 1897, ch. 223, sec. 76; and now it appears as Consoli- 
dated Municipal Act, 1903, 3 Edw. VII. ch. 19, sec. 76 — the 
amendment, 6 Edw. VII. ch. 35, sec. 5, not affecting this part of 
the section. 

I think that the Legislature must have had in view the 
difference between legal and equitable estates : and that the 
language now employed, differing as it does from that formerly 
used, must Le given full effect to. 

What estate then had Rymal at the time of the election, and 
what estate has he now ? 

At the time of the election, it is plain that he had the legal 
estate, and that such legal estate was then worth not only the 
$4,500 for which the mortgage was subsequently taken, but also 
the amount of cash paid by the mortgagor as well. At the pre- 
sent time, it is equally plain that he has the legal estate in the 
land — that, the mortgage being in fee, this is a freehold, a 
‘ ‘ legal freehold. ’ ’ This could be mortgaged or sold at any time ; 



XXVI.] 



ONTARIO LAW REPORTS. 



277 



and, while it is indeed in equity but a security for the debt, it is 
a valuable security — and worth $4,500. At the time of taking 
the imperfect declaration, there is no question that he could 
have made the declaration in proper form (owning as he did the 
whole estate, and the sale being still in fieri, and it not appear- 
ing that there was any enforceable contract for sale). Whether 
he can now make the declaration must be determined by the 
very words of the declaration itself. Leaving out the (for this 
inquiry) unimportant words, it reads thus: “I . . do solemnly 
declare . . that I have and had to my own use and benefit . . 
as owner at the time of my election such an estate as does qualify 
me to act in the office of deputy reeve for . . . and that such 
estate is (specifying it) and that such estate at the time of my 
election was of the value of at least,” etc., etc. It is to be noted 
that the value at the time of making the declaration is not re- 
quired to be set out. 



Riddell, J. 



1912 

Rex 

EX REL. 

Morton 

v. 

Roberts. 



At the time of the election he had a legal estate worth 
$4,500 and more — no equitable estate had been carved out of it — 
now he has the very same legal estate, but it is worth only $4,500, 
for an equitable estate has been created cutting down the value. 
I think that, employing the language of sec. 76, Rymal “has, as 
owner, a legal freehold which is assessed in his own name on 
the last revised assessment roll of the municipality to at least 
the value of $4,500.” 

But it is argued that mortgagees cannot be considered 
persons contemplated by the statute — and that they cannot 
qualify unless they are in possession. The rule that mortgagees 
should not vote unless they are in possession, so far as it exists 
at all, is statutory — and an examination of the statutes rather 
furnishes us with an argument that mortgagees have the same 
rights as to voting, etc., as any other owner of a freehold unless 
they are expressly excluded. The first Act is (1696), 7 & 8 Wm. 
III. ch. 25, which, by sec. 7, provides that “no person or persons 
shall be allowed to have any vote in election of members to serve 
in Parliament, for or by reason of any trust estate or mortgage, 
unless such trustee or mortgagee be in actual possession or 
receipt of the rents and profits of the same estate ; but that the 
mortgagor, or cestui que trust, in possession, shall and may vote 



278 



ONTARIO LAW REPORTS. 



[VOL. 



Riddell, J. 



1912 



Rex 

EX EEL. 

Morton 



v. 

Roberts. 



for the same estate, notwithstanding such mortgage or trust . 

As it was only freeholders who were given the right to vote, it 
seems to me that Parliament considered a mortgagee a free- 
holder, and considered that he would have the right to vote, 
unless specially legislated against. The same provision exclud- 
ing mortgagees and trustees not in possession appears in (1832) 
2 Wm. IV. ch. 45, sec. 23, and in (1843) 6 & 7 Viet. ch. 18, sec. 
74. 

There are cases in which a mere trustee had been held not 
entitled to vote — e.g., South Grenville Election, Jones’s Case 
(1872), H.E.C. 163, at p. 176 : but that w T as because of the words 
‘ 1 in his own right ’ ’ — shewing that it was a real beneficial owner- 
ship that was required by the statute. 

I can find nothing in principle or authority to prevent a 
mortgagee who is assessed for the property qualifying on his 
legal estate. 

The same considerations apply also to Roberts. 

If they make a proper declaration, within ten days, their 
appeals will be allowed — but without costs here or below. They 
are given an indulgence in being allowed to make now a declara- 
tion which should have been made three months ago, and with- 
out which they had no right to their seats. It would seem neces- 
sary again to call attention to the necessity of observing the 
plain directions of the statutes, the forms prescribed, etc. 

If the declaration be not made by either within ten days, the 
appeal of that one will be dismissed with costs. 

While it is, in my view, probable that there is no necessity 
for the relator to file an affidavit that the facts as to the defect 
in the declaration came to his knowledge only within six weeks 
before the notice of motion was served, he will he permitted to 
do so, if so advised, for the greater caution in case of an appeal 
from this decision, or in case either of the respondents fails to 
make the proper declaration. 



XXVI.] 



ONTARIO LAW REPORTS. 



279 



[TEETZEL, J.] 

National Trust Co. v. Trusts and Guarantee Co. 

• 

Company — Winding-up — Realisation of Assets — Claim by Trustee for Bond- 
holders under Mortgage Given to Secure Bonds — Mortgage Covering Per- 
sonal Property — Invalidity for Want of Registration — Bills of Sale and 
Chattel Mortgage Act , secs. 2, 5, 23 — Agreement not to Register — Book- 
debts — Validity of Transfer without Registration — Absence of Notice to 
Debtors — Status of Liquidator to Contest Claim — Representation of 
Creditors — Jus Tertii — Parties. 

An incorporated manufacturing and trading company made a mortgage to 
the plaintiff, as trustee for bondholders, to secure payment of its bonds, of 
“its undertakings then made or in course of construction or thereafter to 
be constructed, together with all the properties, real or personal, tolls, in- 
comes, and sources of money, rights, privileges, and franchises, owned, 
held, or enjoyed by it.” The lands were specifically set out in the mort- 
gage-deed; and it was “declared and agreed, for the purpose of this 
mortgage security, that all machinery, plant, and personal property of 
the company are to be considered fixtures to the realty. . . . This 

mortgage is not to be registered as a bill of sale or chattel mortgage.” 
The company made an assignment for the benefit of creditors; and a 
winding-up order was afterwards made, under which the defendant was 
appointed liquidator; the defendant then took possession of all the 
assets, and realised such as were convertible. The plaintiff claimed the 
assets under the mortgage, and brought this action for an account, or, 
in the alternative, for damages for conversion:- — 

Held, that, as the charge upon the company’s real and personal property 
was not created by the bonds, but by the mortgage, the latter was, so far 
as it purported to charge personal property, a “mortgage or conveyance 
intended to operate as a mortgage of goods and chattels, within the 
meaning of secs. 2 and 23 of the Bills of Sale and Chattel Mortgage Act, 
R.S.O. 1897, ch. 148; and, not having been accompanied by an immediate 
delivery and an actual and continued change of possession of the things 
mortgaged, and not having been registered as a chattel mortgage, was, as 
such, under sec. 5 of the Act, “absolutely null and void as against credi- 
tors of the mortgagor.” 

Johnston v. Wade (1908), 17 O.L.R. 372, distinguished. 

Semble, that, as a chattel mortgage, it was also* void ab initio as against 
creditors, by reason of the agreement that it should not be registered 
under the Bills of Sale and Chattel Mortgage Act: Clarkson v. McMaster 
& Co. (1895), 25 S.C.R. 96, 105, 106. 

Held, also, that, although the mortgage-deed did not specifically mention 
present or future book-debts, the language above-quoted was sufficient to 
create an equitable charge on present and future book-debts; that book- 
debts are not within the Bills of Sale and Chattel Mortgage Act, and a 
transfer of them does not require registration; and, therefore, that as 
to any book-debts that were unpaid at the date of the assignment by the 
company, the plaintiff was entitled to recover the amount that was 
realised therefrom by the assignee or the defendant; and that the fact 
that no notice of the charge was given by the plaintiff to the debtors did 
not alter that right. 

Thibaudeau v. Paul (1894), 26 O.R. 385, and Re Perth Flax and Cordage 
Co. (1909), 13 O.W.R. 1140, specially referred to. 

Held, also, that the liquidator, being from the beginning primd facie law- 
fully in possession of the property in question as an officer of the Court, 
and being charged with the duty of applying the proceeds in payment 
of the company’s creditors in due course of administration, was entitled, 
in right of the creditors of the company, to contest the validity of the 
plaintiff’s mortgage and to maintain in defence of the action the superior 
claim of the creditors whom it represented; and it was not necessary to 
have one of the creditors added as a party. 

Re Canadian Camera and Optical Co. (1901), 2 O.L.R. 677, 679, followed. 



1912 
April 17 



280 



ONTARIO LAW REPORTS. 



Teetzel, J. 

1912 

National 
Trust Co. 
v. 

Trusts 

and 

Guarantee 

Co. 



[VOL. 

Action by the National Trust Company Limited, trustee for 
the bondholders of the Raven Lake Portland Cement Company, 
against the Trusts and Guarantee ‘Company Limited, liquidator 
of the Raven Lake Portland Cement Company, for an account 
of the proceeds of certain goods and chattels, book-debts and 
choses in action, alleged to have been converted and sold and 
collected by the defendant, or, in the alternative, for damages 
for conversion. See Be Raven Lake Portland Cement Co., 
National Trust Co. v. Trusts and Guarantee Co. (1911), 24 
O.L.R. 286. 

March 11. The action was tried before Teetzel, J., without 
a jury, at Toronto. 

B. C. H. Cassels, for the plaintiff. 

W. Laidlaw, K.C., for the defendant. 

April 17, Teetzel, J. : — The plaintiff is trustee for bond- 
holders of the Raven Lake Portland Cement Company, herein- 
after referred to as the company, and the defendant is liquida- 
tor of that company under the Dominion Winding-up Act. 

By mortgage dated the 13th September, 1904, the com- 
pany duly granted, assigned, transferred and conveyed and 
mortgaged to the plaintiff in trust, subject to a certain other 
mortgage, all and singular its undertakings then made or in 
course of construction or thereafter to be constructed, together 
with all the properties, real or personal, tolls, incomes, and 
sources of money, rights, privileges, and franchises, owned, held, 
or enjoyed by it then or at any time prior to the full payment 
of the bonds thereby secured, to secure payment of the bonds 
mentioned in the mortgage, amounting to $50,000, and interest. 
The lands are specifically set out in a schedule attached to the 
mortgage. The mortgage also purports to cover ‘ ‘ all machinery 
of every nature and kind, including all tools and implements 
used in connection therewith, which are now or which may here- 
after, during the currency of this mortgage, be brought upon the 
said lands or into any of the buildings thereon, including all 
machinery used or to be used in the manufacture of cement and 
plant and tools connected therewith. . . . The dredge at 

Raven Lake, the machinery, tools, etc., to be deemed fixtures for 



XXVI.] 



ONTARIO LAW REPORTS. 



281 



the purpose of this mortgage, whether the same shall be actually 
affixed to the said lands or buildings or not.” 

The 23rd and 24th clauses read as follows : ‘ ‘ And it is further 
hereby declared and agreed, for the purpose of this mortgage 
security, that all machinery, plant, and personal property of 
the company are to be considered fixtures to the realty. And 
it is expressly understood and agreed that this mortgage is not 
to be registered as a bill of sale or chattel mortgage. Provided 
and it is hereby declared that the company may at all times, so 
long as there is no default in payment of principal or interest 
on the said bonds or otherwise hereunder, sell and dispose of 
its manufactured products in the ordinary course of business, 
free from the lien of this mortgage.” 

Each bond, a copy of which is set forth in the mortgage, con- 
tains this clause: “This bond is one of a series amounting in the 
aggregate to $50,000, and is secured by a mortgage duly ex- 
ecuted according to law conveying to the National Trust 'Com- 
pany Limited as trustee all the present and future real and 
personal properties, rights, franchises, and powers of the Raven 
Lake Portland Cement Company Limited, as by reference to 
the said mortgage will more fully appear; the nature of the 
security, the rights of the holders of the bonds secured by it, 
and the terms of the trust appear by the said mortgage, to which 
reference is hereby expressly directed, and which terms are made 
a part of this bond.” 

The mortgage contains the usual provisions for redemption, 
and that until default the mortgagors shall be permitted “to 
possess, operate, manage, use, and enjoy the mortgaged premises, 
and to take and use the rents, incomes, profits, and issues thereof, 
in the same manner and to the same extent as if these presents 
had not been executed.” 

It also contains elaborate provisions enabling the mortgagee, 
upon default, to take possession and operate or sell the mort- 
gaged premises. 

The mortgage was duly registered against the lands covered 
thereby, but was not filed as a chattel mortgage, nor was any- 
thing done to comply with secs. 2, 3, or 23 of the Bills of Sale 
and Chattel Mortgage Act, as from the beginning the plaintiffs 



Teetzel, J. 

1912 

National 
Trust Co. 
v. 

Trusts 

AND 

Guarantee 

Co. 



282 



Teetzel, J. 

1912 

National 
Trust Co. 
v. 

Trusts 

and 

Guarantee 

Co. 



ONTARIO LAW REPORTS. [vol. 

assumed that the provisions of that Act did not apply to the 
mortgage. 

On the 14th September, 1907, the company made a general 
assignment for the benefit of its creditors to Henry R. Morton, 
who entered into possession as assignee, and proceeded to realise 
upon the personal estate of the company. 

By order dated the 20th September, 1907, made under the 
Dominion Winding-up Act, the company was declared to be 
insolvent and ordered to be wound up, the defendant appointed 
provisional liquidator, and a reference directed to Mr. Mc- 
Andrew, an Official Referee, to appoint a permanent liquidator, 
and to take all necessary proceedings for and in connection with 
the winding-up of the company. On the 30th November, 1907, 
the defendant was appointed permanent liquidator. 

The appointment of liquidator having superseded that of 
the assignee, the former took possession of all the assets of the 
company, and proceeded to convert the same into money and to 
collect outstanding accounts and generally to administer the 
affairs of the company. 

By the 8th September, 1909 (the date of the liquidator’s 
statement of receipts and disbursements), the defendant had ap- 
parently realised upon all the convertible assets of the company ; 
and, so far as I can judge from the statement, those assets con- 
sisted chiefly of manufactured cement, sacks* for cement, coal, 
book-accounts, and cash received from the assignee as proceeds 
of goods sold and book-debts collected, before he handed the 
estate over to the defendant. It does not appear that machinery 
or anything in the nature of fixtures was realised upon by the 
defendant. 

By letter of the 9th November, 1907, the plaintiff gave the 
defendant notice of the mortgage, stating that it covered all the 
property of the company, and was in default, but no steps were 
taken to recover the goods and chattels then in the defendant’s 
possession, or their proceeds, till October, 1909, when the plain- 
tiff served a notice, in the winding-up proceedings, claiming all 
the proceeds of the assets of the company realised by the de- 
fendant as liquidator, and all other assets (if any) which may 
be unrealised in the hands of the liquidator, upon the ground 



XXVI.] 



ONTARIO LAW REPORTS. 



283 



that all such assets belonged to the plaintiff by virtue of the 
above-recited mortgage. 

Nothing appears to have been done under this notice until 
the 28th September, 1910, when joint objections to the plain- 
tiff’s claim were filed and served by the defendant and the Im- 
perial Plaster Company Limited, the latter “on behalf of them 
selves and all other creditors of the Raven Lake Portland Cement 
Company Limited,” upon the ground, among others, that the 
mortgage was void for non-compliance with the Bills of Sale and 
Chattel Mortgage Act, and that the assets were not covered by 
the mortgage. Instead of adjudicating upon the claim and the 
objections thereto, the learned Referee, on the 3rd November, 
1910, granted leave to issue a writ and prosecute an action 
against the defendant “in respect of goods and chattels and 
book-debts and choses in action formerly belonging to the Raven 
Lake Portland Cement Company Limited, or the proceeds 
thereof, claimed by the National Trust Company Limited.” 

This action was accordingly brought, but it is to be observed 
that the other contestant, the Imperial Plaster Company Limi- 
ted, was neither made a party to the action, nor was its objec- 
tion adjudicated upon by the Referee. 

An application was made to the Master in 'Chambers by the 
defendant to have that company added as a party defendant, 
but the motion was refused, and the refusal was sustained on 
appeal, without prejudice to an application being made to the 
trial Judge, if it should appear to him that the proposed de- 
fendant is a necessary party to enable him to adjudicate upon 
the title to the money in question. 

The statement of claim sets forth the mortgage, alleges de- 
fault and non-payment, and charges that, notwithstanding the 
plaintiff’s rights under the mortgage, the defendant took pos- 
session of certain goods and chattels, the property of the said 
company and subject to the plaintiff’s mortgage, and sold the 
same, and also collected certain book-debts and choses in action, 
the property of the said company, and wrongfully converted the 
same to its own use, and refused to deliver the same or account 
for the proceeds thereof to the plaintiff ; and the plaintiff claims 



Teetzel, J. 

1912 

National 
Trust Co. 

y. 

Trusts 

AND 

Guarantee 

Co. 



284 

Teetzel, J. 

1912 

National 
Trust Co. 
v. 

Trusts 

AND 

Guarantee 

Co. 



ONTARIO LAW REPORTS. [vol. 

an account of the same, or, in the alternative, damages for con- 
version of the said goods, chattels, and book-accounts. 

The defendant pleads the winding-up proceedings, disclaims 
any personal right or interest in the property, denies unlawful 
conversion, submits that the Imperial Plaster Company Limited, 
on behalf of itself and all other creditors, should he added as a 
party defendant, and repeats the objections to the plaintiff’s 
claim set forth in the notice of contestation above referred to. 

The following questions arise for determination: — 

(1) Does the mortgage hind the goods and chattels in ques- 
tion notwithstanding the provisions of the Bills of Sale and 
Chattel .Mortgage Act? 

(2) Does the mortgage hind the book-accounts in question, 
or any of them? 

(3) Is the defendant, as liquidator, entitled to contest the 
plaintiff’s claim on the ground that the provisions of the Bills of 
Sale and Chattel Mortgage Act were not complied with? 

(4) If the defendant is not so entitled, should the Imperial 
Plaster Company Limited be added as a party defendant? 

Upon the first question, counsel for the plaintiff submits that 
the mortgage creates a floating security, and as such extends to 
all personal property of the company, whether existing at the 
date of the mortgage or subsequently acquired, and relies upon 
the decision in Johnston v. Wade (1908), 17 O.L.R. 372, to sup- 
port his argument that the provisions of the Bills of Sale and 
Chattel Mortgage Act are not applicable to this mortgage. 

In that case there was not, as in this case, a mortgage to 
secure bonds; but the bonds, upon their face and in the condi- 
tions endorsed upon them (see p. 390), declared that all the 
company’s “ property, real and personal, rights, powers, and 
assets of every kind and description, present and future, includ- 
ing its uncalled capital,” were charged with the payment of the 
bonds. The decision in that case was, that such bonds, issued 
pursuant to a by-law passed under the provisions of the Com- 
panies Act, then R.S.O. 1897, ch. 191, sec. 49, were not mort- 
gages of goods and chattels of an incorporated company within 
the meaning of the Bills of Sale and Chattel Mortgage Act, and 
were not, therefore, void as against the defendant, the assignee of 



XXVI.] 



ONTARIO LAW REPORTS. 



285 



the company for the benefit of creditors, because not registered 
under the provisions of that Act. After reviewing the authori- 
ties in England which hold that such debentures need not be 
registered under the English Bills of Sale Act in order to be 
effective against other creditors, and referring to the language 
of sec. 2 of the Bills of Sale and Chattel Mortgage Act, R.S.O. 
1897, ch. 148 ? the Chief Justice of Ontario (p. 386) observes: 
“The words ‘mortgage or conveyance intended to operate as 
a mortgage of goods and chattels’ describe instruments of a 
well-known character. They do not convey the idea of deben- 
tures of the kind in question here, which pass no property in 
the goods and chattels to the holder, and confer upon him no 
right to take possession of them or interfere with them in any 
way, except through the interposition of the Court. It seems 
plain that such an instrument was not within the meaning of 
the Act or in the mind of its framers, as it stood prior to the 
passing of sec. 23. That section, as amended by 4 Edw. VII. 
ch. 10, sec. 36, provides that ‘in the case of a mortgage or con- 
veyance of goods and chattels of any incorporated company 
made to a bondholder or bondholders or to a trustee or trustees 
for the purpose of securing the bonds or debentures of such 
company,’ the affidavit of bona fides may be made as therein 
prescribed. Here again the difficulty presents itself that the 
section applies only to a mortgage or conveyance of goods and 
chattels. And on its face it seems to exclude a bond or deben- 
ture simply. It deals with the case of a mortgage or convey- 
ance made for the purpose of securing the bonds or debentures 
of a company; and enacts (amongst other things) that the affi- 
davit may be made by the mortgagee or one of the mortgagees, 
all which seems quite inapplicable to bonds or debentures by 
themselves.” Mr. Justice Osier, at p. 388, says: “Section 23 of 
the Act shews how far the Legislature intended to go in dealing 
with instruments for securing the bonds or debentures of a 
company. The only instruments of that class which are re- 
quired to be registered are mortgages or conveyances of goods 
and chattels made to a bondholder or trustee for the purpose of 
securing the bonds or debentures of the company— instruments, 
as I understand the section, of the some character as those men- 



Teetzel, J. 

1912 

National 
Trust Co. 

v. 

Trusts 

and 

Guarantee 

Co. 



20 — XXVI. O.L.R. 



286 



ONTARIO LAW REPORTS. 



[VOL. 



Teetzel, J. 

1912 

National 
Trust Co. 
v. 

Trusts 

and 

Guarantee 

Co. 



tioned in other sections of the Act, something quite different 
from the security by way of floating charge which the Com- 
panies Act enables a company to create by the bonds them- 
selves.” Mr. Justice Meredith, at p. 390, says: “ There was no 
mortgage given for securing payment of these bonds, but they, 
upon their face and in the conditions endorsed on them, declared 
that all the company’s 1 property, real and personal, rights, 
powers, and assets 'of every kind and description, present and 
future, including its uncalled capital,’ were charged with the 
payment of the bonds. That the bonds are not mortgages, or 
conveyances intended to operate as mortgages, of goods and 
chattels, within the provisions of the Bills of Sale and Chattel 
Mortgage Act, I cannot but think plain : they are neither in form 
nor in substance such a mortgage. Under them no title to the 
property in, or right to possession of, the chattels passed to the 
bondholders: a charge upon the chattels and other the pro- 
perty of the company was created, giving them priority of pay- 
ment out of the assets of the company.” 

The validity and effect of what is called a “floating charge” 
on the property, both present and future, of a company, has 
been the subject of much judicial consideration in England. 
The cases are collected and discussed in Palmer’s Company 
Law, 9th ed., pp. 307-311, where it is pointed out that it has been 
well-settled by the authorities that a floating charge is valid as 
against execution and general creditors, whether in a winding- 
up or otherwise, and retains its floating character, unless other- 
wise agreed, until a receiver is appointed or a winding-up 
commences. 

As to the injustice to subsequent execution creditors arising 
from the nature of a floating security as defined by the authori- 
ties, see observations of Buckley, J., in In re London Pressed 
Hinge Co., [1905] 1 Ch. 576, at p. 583; also the dissenting judg- 
ment of Garrow, J.A., in Johnston v. Wade, 17 O.L.R. at p. 392 
et seq. 

The English Companies Act, 1908, sec. 93, providing for 
registration of floating charges and declaring them void as 
against creditors unless registered, would appear to remove the 
danger of injustice to other creditors, in England ; and it may be 



XXVI.] 



ONTARIO LAW REPORTS. 



287 



that our statute-law should also be amended, in view of the hold- 
ing in Johnston v. Wade, by declaring them void against credi- 
tors unless registered under sec. 78 of the Ontario Companies 
Act, 1907. 

As pointed out by the Chief Justice of Ontario, in Johnston 
v. Wade , at p. 386, the English cases, “ turning as they do upon 
the terms of legislation which is not the same as our provincial 
legislation, afford but little assistance, and in the last analysis 
we must have recourse to the language of the Acts of our own 
Legislature;” and the judgment in that case is clearly based 
on the conclusion that a debenture qn its face charging the 
property of a company with its payment was not a “mortgage 
or conveyance intended to operate as a mortgage of goods and 
chattels,” within the meaning or comtemplation of our Bills of 
Sale and Chattel Mortgage Act. 

That case is, therefore, differentiated from this case by the 
fact that in this case the bonds do not create the charge, but a 
mortgage is given which creates the charge in favour of a trustee 
for the bondholders; and, although it embraces the company’s 
real as well as its personal property, I think that, so far as it 
purports to charge personal property, it is clearly a “mortgage 
or conveyance intended to operate as a mortgage of goods and 
chattels,” within the meaning of secs. 2 and 23 of our Bills of 
Sale and Chattel Mortgage Act; and, not having been accom- 
panied by an immediate delivery and an actual and continued 
change of possession of the things mortgaged, and not having 
been registered as a chattel mortgage, is, as such, under sec. 5 
of the Act, “absolutely null and void as against creditors of the 
mortgagor. ” 

As a chattel mortgage, it was also void ab initio as against 
creditors, according to the view of the late Chief Justice Strong 
in Clarkson v. McMaster & Co. (1895), 25 S.C.R. 96, at pp. 105- 
6, by reason of the agreement that it should not be registered 
under the Bills of Sale and Chattel Mortgage Act. 

Then, as to the book-debts, it is well settled that they are not 
within the Bills of Sale and Chattel Mortgage Act, and that a 
transfer of them does not require registration : Kitching v. Hicks 



Teetzel, J. 

1912 

National 
Trust Co. 
v. 

Trusts 

and 

Guarantee 

Co. 



288 

Teetzel, J. 

1912 

National 
Trust Co. 

v. 

Trusts 

and 

Guarantee 

Co. 






ONTARIO LAW REPORTS. [vol. 

(1884), 6 0. R. 739; Tailby v. Official Receiver (1888), 13 App. 
Cas. 523; Thibaudeau v. Paul (1894), 26 O.R. 385. 

While the mortgage in question does not specifically mention 
present or future hook-debts, I think the language “ under- 
takings . . . together with . . . incomes, and sources of 

money, rights, privileges . . . held or enjoyed by it now or 

at any time prior to the full payment,” etc., is sufficiently com- 
prehensive to create an equitable charge on present and future 
book-debts. In Re Perth Flax and Cordage Co. (1909), 13 
O.W.R. 1140, where the language of the chattel mortgage was 
“all property, real and personal, that shall hereafter be ac- 
quired and owned by the company,” it was held that these 
words were amply sufficient to include future book-debts. A 
charge created by such general language as that employed in 
this mortgage attaches, I think, to the subject charged, in the 
varying condition it happens to be from time to time. See 
Governments Stock and Other Securities Investment Co. v. 
Manila R.W. Co., [1897] A.C. 81, at p. 86; and Buckley's Com- 
panies Acts, 9th ed., pp. 230, 231. 

I am of opinion, therefore, that as to any book-debts that 
were unpaid at the date of the assignment by the company, the 
plaintiff is entitled to recover the amount that was realised there- 
from by the assignee or the defendant; and that the fact that 
no notice of the charge was given by the plaintiff to the debtors 
does not, as argued by Mr. Laidlaw, alter that right. Upon this 
point, Thibaudeau v. Paul {supra)., Re Perth Flax and Cordage 
Co. {supra), and Eby-Blain Co. v. Montreal Packing Co. (1908), 
17 O.L.R. 292, are, I think, conclusive. 

The question of the right of the defendant as liquidator to 
contest the plaintiff's claim under the mortgage, and to hold 
the proceeds of the chattel property for the benefit of the credi- 
tors, has given me much trouble ; but I have arrived at the con- 
clusion that the defendant has that right, and that it is not 
necessary, for the purpose of adjudicating upon the title to the 
fund in question, to add the Imperial Plaster Company as a 
defendant. Under sec. 33 of the Winding-up Act, the liquida- 
tor, upon his appointment, ‘ ‘ shall take into his custody or under 
his control, all the property, effects and choses in action to which 






XXVI.] 



ONTARIO LAW REPORTS. 



289 



the company is or appears to be entitled.” Having done this, 
further general duties are, as stated in Palmer’s Company Law, 
9th ed., p. 395, “to make out the requisite lists of contributories 
and of creditors, to have disputed cases adjudicated upon, to 
realise the assets, and to apply the proceeds in payment of the 
company’s debts and liabilities, in due course of administration, 
and, having done that, to divide any surplus amongst the con- 
tributories, and to adjust their rights.” 

While the title of the estate of the company does not, under 
the Act, vest in the liquidator, it must clearly be his duty, as an 
officer of the Court, when he has in his custody property to 
which the company appears to be entitled, to protect that pro- 
perty for the benefit of the creditors who may be interested 
therein. Now, when the defendant, as liquidator, took posses- 
sion of the property in question, which was then in the posses- 
sion of the company’s assignee for creditors, it was property to 
which, within the meaning of sec. 33, the company or its assignee 
for creditors “appeared to be entitled.” 

Had the liquidator given up this property or its proceeds, 
either when notified of the plaintiff’s mortgage or when the pro- 
perty was demanded, without submitting to the Court the claim 
on behalf of creditors to the effect that the plaintiff’s mortgage 
was void as against them, the liquidator would, I think, have 
committed a gross breach of duty. When the claim was pre- 
sented, by the plaintiff, the liquidator joined with a creditor 
on behalf of all other creditors of the company in contesting 
it, under secs. 85 to 90 of the Act. Instead of submitting to a 
summary disposition of the matter before the Official Referee, 
the plaintiff elected, upon leave of the Court, to bring this 
action against the liquidator only. 

In Re Canadian Camera and Optical Co. (1901), 2 O.L.R. 
677, at p. 679, Street, J., observes: “It is necessary to bear in 
mind the position in which a liquidator stands in a compulsory 
winding-up, viz., that, while in no sense an assignee for value 
of the company, yet he stands for the creditors of the company, 
and is entitled to enforce their rights, because their right to pro- 
secute actions themselves against the company and to recover 
their claims directly out of the property of the company is taken 
away by the Winding-up Act.” 



Teetzel, J. 

1912 

National 
Trust Co. 
v. 

Trusts 

and 

Guarantee 

Co. 



290 



ONTARIO LAW REPORTS. 



Teetzel, J. 

1912 

National 
Trust Co. 
v. 

Trusts 

and 

Guarantee 

Co. 



[VOL. 

Being, therefore, from the beginning, primd facie lawfully 
in possession of the property in question, as an officer of the 
Court, and being charged with the duty of applying the pro- 
ceeds in payment of the company’s creditors in due course of 
administration, I hold that the defendant is entitled, in right 
of the creditors represented by it as liquidator, to contest in this 
action the validity of the plaintiff’s mortgage. 

Under the circumstances found in this case, the liquidator is, 
I think, entitled to maintain in defence of the action the super- 
ior claim of the creditors whom it represents. 

Discussing the defence of jus tertii, it is stated in Clerk & 
Lindsell on Torts, 3rd ed., p. 252, that, “if the plaintiff makes 
out a good primd facie title by possession or otherwise, the de- 
fendant must in the first place impeach that title by shewing 
that there is a better right in some one else. That better right 
may be in himself or in some person under whose authority he is 
acting, or under whom he claims, and in such a case he clearly 
has a good defence, for a man cannot be guilty of trespass or 
conversion in respect of goods to the possession of which he is 
entitled. ’ ’ 

Here the defendant’s position is strengthened by the fact 
that, at the time of the action, the primd facie title by possession 
was in the defendant. See, further, as to defence of title of third 
party, Richards v. Jenkins (1886), 17 Q.B.D. 544, affirmed in 
(1887), 18 Q.B.D. 451. 

Judgment will be in favour of the plaintiff for payment by 
the defendant of all money realised from book-debts outstanding 
and unpaid at the date of the 'assignment, the 14th September, 
1907, but dismissing the balance of the plaintiff’s claim, and 
declaring that the mortgage was as a chattel mortgage void as 
against the creditors of the company. No costs of action to either 
party, but the defendant’s costs will be paid out of the balance 
of the fund, as between solicitor and client. 

If the parties cannot ag-ree upon the amount to be paid to 
the plaintiff, there will be a reference to the Master in Ordinary, 
with costs of such reference reserved until after the Master’s 
report. 



XXVI.] 



ONTARIO LAW REPORTS. 



291 



[MEREDITH, C.J.C.P.] 

Townsend v. Northern Crown Bank. 

Banks and Banking — Securities Taken by Bank under sec. 90 of Bank Act 
— Securities upon Sawn Lumber — Wholesale Dealer — “Products of the 
Forest” — “And the Products thereof” — Bank Act, sec. 88(1) — Assign- 
ment for Benefit of Creditors — Securities Given within Sixty Days — 
Continuation of Former Securities — Assignment of Building Contracts 
— Lumber Used in Building — Assignment of Book-debts. 

The words “and the products thereof,” in sub-sec. 2 of sec. 74 of the Bank 
Act, 53 Viet. ch. 31 (now, with some immaterial changes, sub-sec. 1 of 
sec. 88 of RjS.C. 1900, ch. 29), apply to all the articles previously men- 
tioned in the sub-section, and, therefore, apply to the products of the 
forest. 

Dictum of Hall, J., in Molsons Bank v. Beaudry (1901), Q.R. 11 K.B. 212, 
approved. 

Semble, that sawn lumber is a product of the forest, within the meaning of 
the sub-section. 

Held, upon the evidence, that B. was a wholesale dealer in lumber, and,, 
therefore, a person from whom securities upon lumber could lawfully 
be taken by the bank, under the sub-section. 

Held, also, upon the evidence, that, although the security under which the 
bank claimed was given less than sixty days before the making of an 
assignment by B. to the plaintiff for the benefit of his creditors, it was 
a continuation of a former security of the like character held by the 
bank for the .indebtedness, and was entitled to prevail against the 
assignment. 

Held, also, that doors and window sashes and the like, manufactured from 
lumber upon which the bank held security, were products of the lumber 
covered by the securities. 

Some of the lumber covered by the securities was used by B. in the erection 
of buildings: — 

Held, that, so- far as the money payable under the building contracts 
assigned to the bank represented the lumber so used, the bank were 
entitled to it. 

Held, also, that the bank’s claim to book-debts assigned by B. could not 
prevail against the assignment to the plaintiff. 

The plaintiff, the assignee for the benefit of creditors of 
Joseph E. Brethonr, a builder, contractor, and dealer in lum- 
ber, brought this action to set aside certain securities given by 
Brethour to the defendants to secure his indebtedness to them. 

June 14, 1911. The action was tried before Meredith, C.J. 
C.P., without a jury, at Toronto. 

W. Laidlaw, K.C., for the plaintiff. 

F. Arnoldi, K.C., for the defendants. 



1912 

April IS 



April 18, 1912. Meredith, C.J. : — The securities which 
are attacked are securities taken by the defendants under sec.. 



292 



ONTARIO LAW REPORTS. 



Meredith, C.J. 

1912 

Townsend 

v. 

Northern 

Crown 

Bank. 



[VOL. 

90 # of the Bank Act, R.S.C. 1906, ch. 29, and assignments by 
Brethonr of moneys payable to him under building contracts 
which he had entered into, and book-debts, and these securities 
were given within sixty days before the making of the assign- 
ment; and the plaintiff attacks them on several grounds. 

The securities taken under sec. 90 of the Bank Act are 
attacked on two grounds. 

It was contended that Brethour was not a person from 
whom securities upon lumber could lawfully be taken, 
because, as is said, he was a builder, and not a wholesale 
dealer in lumber.! The evidence does not support this con- 
tention, but shews that part of the business which Brethour 
carried on was that of a wholesale dealer in lumber. 

It also contended that sawn lumber is not a product of the 
forest, within the meaning of sec. 88. 

In support of this contention Molsons Bank v. Beaudry 
(1901), Q.R. 11 K.B. 212, was cited. The opinion of the Chief 
Justice (Sir Alexander Lacoste) in that case, no doubt, sup- 
ports the contention. Hall, J., however, differed from the Chief 
Justice, and the other member of the Court (Wurtele, J.) ex- 
pressed no opinion on the point. The question was not neces- 
sary for the decision, as the Court was unanimous in affirming 

*90. The bank shall not acquire or hold any warehouse receipt or bill 
of lading, or any such security as aforesaid, to secure the payment of any 
bill, note, debt, or liability, unless such bill, note, debt or liability is nego- 
tiated or contracted, — 

(a) at the time of the acquisition thereof by the bank; or, 

(b) upon the written promise or agreement that such warehouse receipt 
or bill of lading or security would be given to the bank; 

Provided that such bill, note, debt, or liability may be renewed, or the 
time for the payment thereof extended, without affecting any such security. 

2. The bank may, — 

(a) On shipment of any goods, wares and merchandise for which it 
holds a warehouse receipt, or any such security as aforesaid, surrender 
such receipt or security and receive a bill of lading in exchange thereof ; or, 

(b) on the receipt of any goods, wares and merchandise for which it 
holds a bill of lading, or any such security as aforesaid, surrender such bill 
of lading or security, store the goods, wares and merchandise, and take a 
warehouse receipt therefor, or ship the goods, wares and merchandise, or 
part of them, and take another bill of lading therefor. 

f Section 88, sub-sec. 1, of the Bank Act, B.S.C. 1906, ch. 29, provides: 
The bank may lend money to any wholesale purchaser or shipper of or 
dealer in products of agriculture, the forest, quarry and mine, or the sea, 
lakes and rivers, or to any wholesale purchaser or shipper of or dealer in 
live stock or dead stock and the products thereof, upon the security of 
such products, or of such live or dead stock and the products thereof. 



XXVI.] 



ONTARIO LAW REPORTS. 



293 



on other grounds the judgment that had been given against the 
plaintiffs. 

The provision of the Bank Act then under consideration was 
sub-sec. 2 of sec. 74 of 53 Yict. ch. 31, which reads as follows: 
“2. The bank may also lend money to any wholesale purchaser or 
shipper of products of agriculture, the forest and mine, or the 
sea, lakes and rivers, or to any wholesale purchaser or shipper 
of live stock or dead stock, and the products thereof, upon the 
security of such products, or of such live stock or dead stock, 
and the products thereof.” That sub-section was repealed by 
sec. 17 of 63 & 64 Yict. ch. 26, and re-enacted, with some changes 
that are not material to the present inquiry ; and the substituted 
sub-section appears in R.S.C. 1906, ch. 29, as sub-sec. 1 of sec. 88. 



Meredith, C.J. 

1912 

Townsend 

v. 

Northern 

Crown 

Bank. 



In my view, the construction placed by Hall, J., on sec. 74, 
was the correct one. In my opinion, the words “and the pro- 
ducts thereof,” in the fourth and fifth lines, apply to all the 
articles previously mentioned in the sub-section, and, there- 
fore, to the products of the forest, and the words “the 
products thereof, ’ ’ in the last line, apply as well to the products 
mentioned in the earlier part of the sub-section as to the pro- 
ducts of live stock and dead stock. 

Being of this opinion, it is unnecessary to express an opin- 
ion as to whether sawn lumber is a product of the forest, within 
the meaning of the sub-section ; but I am inclined to think that 
it is. 

It is further contended that, as the security under which the 
defendants claim was given less than sixty days before the mak- 
ing of the assignment, it cannot prevail against the assignment. 
That security was, however, but a continuation of a former 
security of the like character held by the defendants for the 
indebtedness; and this contention, therefore, fails. 

Some of the lumber upon which the defendants held security 
was manufactured into doors and window sashes and the like, 
and these products of the lumber are covered by the securities : 
R.S.C. 1906, ch. 29, secs. 88, 89. 

None of the other articles covered by the securities are within 
sec. 88 of the Revised Act; and the securities do not, therefore, 
extend to them. 



294 



ONTARIO LAW REPORTS. 



Meredith, C.J. 

1912 

Townsend 

v. 

Northern 

Crown 

Bank. 



D. C. 
1912 

April 18 



VOL. 



Some of the lumber covered by the securities was used by 
Brethour in the erection of buildings; and, as far as the money 
payable under the building contracts assigned to the defendants 
represents the lumber so used, they are entitled to it. 

The claim of the defendants to the hook-debts cannot be 
supported; and, indeed, according to my recollection of what 
took place at the trial, it was abandoned. 

If the parties cannot agree as to it, there will he a reference 
to the Master in Ordinary to determine what part of Brethour ’s 
stock in trade at the time of the assignment, not being lumber, 
was the product of lumber covered by the defendants 7 securities, 
and what part, if any, of the money payable under the building 
contracts assigned represented lumber or the products of lumber 
covered by those securities. 

As success is divided, there will be no costs to either party. 



[DIVISIONAL COURT.] 



Re Denton. 

Will — Construction — Gift to Brothers and Sisters — Death of Sister between 
Date of Will and Death of Testator — Right of Children of Deceased 
Sister as Secondary Legatees. 

Held, reversing the judgment of Riddell, J., 25 O.L.R. 505, upon one of the 
questions arising upon the will, that the children of the sister who died 
before the testator, but after the date of the will, were entitled to her 
share of the “remainder” under clauses 7 and 8 of the will. 

Review of the authorities. 

Appeal by J. H. Dickenson, representative of Naomi Dicken- 
son, deceased, from the order of Riddell, J., 25 O.L.R. 505, upon 
one of the question submitted as to the construction of the will 
of John M. Denton, deceased. 



April 3. The appeal was heard by a Divisional Court com- 
posed of Boyd, C., Latchford and Middleton, JJ. 

T. G. Meredith, K.C., for the appellant. The question for 
decision arises under the 7th and 8th clauses of the will, and is, 
whether or not the children of Naomi Dickenson, who died after 
the date of the will, but predeceased the testator, are entitled to 
share in the remainder of the fund formed under clause 7 — in 




XXVI.] 



ONTARIO LAW REPORTS. 



295 



other words, whether the gift under clause 8 is substitutionary D * c - 
or substantive. The learned Judge in the Court below held that 1912 
the gift was substitutionary only, and accordingly excluded the Re Denton. 
children of Naomi, considering that he was bound by the prin- 
ciples and authorities cited by him, although the contrary view 
appeared to him to be more agreeable to common sense. The 
law is stated in Theobald on Wills, 7th ed., p. 671, and it is 
submitted that the appellant’s case is supported by the principles 
there laid down, which are not affected by the cases cited on 
behalf of the respondents. In Thornhill v. Thornhill (1819), 4 
Madd. 377, relied on by the learned Judge, the language is not 
the same as here, and that case has been disapproved of in 
Smith v. Smith (1837), 8 Sim. 353, per Shadwell, V.-C., at p. 

357. In re Potter’ s Trust (1869), L.R. 8 Eq. 52, which the 
learned Judge says is explained in In re Hotchkiss’s Trusts 
(1869), L.R. 8 Eq. 643, is in our favour and is good law to-day, 
and the appellant’s case is even stronger. In re H annum, 

[1897] 2 Ch. 39, has been referred to as against our contention, 
but falls far short of justifying such a conclusion. [Middleton, 

J., referred to Re Fleming (1904), 7 O.L.R. 651.] Re- 
ference was made to Cort v. Winder (1844), 1 Coll. 320, 
and to Loring v. Thomas (1861), 1 Dr. & Sm. 497, where Chris- 
topherson v. Naylor (1816), 1 Mer. 320, is distinguished; also 
to In re Woolrich (1879), 11 Ch. D. 663. The appellant relies 
on Loring v. Thomas , which has never been disapproved, as 
giving the principle on which this case should be decided. 

M. D. Fraser, K.C., for the beneficiaries under the will other 
than Naomi Dickenson, relied upon the judgment of Riddell, 

J., and the cases there cited, and the principle laid down in the 
line of authorities from Christopher son v. Naylor, in 1816, to In 
re Hannam, in 1897, as shewing that where the gift is, as here, 
by way of substitution, the children of a person predeceasing 
the testator are excluded. He referred to Re Fleming, supra; 

Re Williams (1903), 5 O.L.R. 345; In re Clark (1904), 8 O.L.R. 

599. In re Potter’s Trust, supra, on which the appellant relies, 
cannot be treated as a binding decision, and James, V.-C., dis- 
cussing that case in In re Hotchkiss’s Trusts, supra, holds that 
Christopher son v. Naylor is still an authority. It may be ad- 



ONTARIO LAW REPORTS. [vol. 

mitted that the appellant’s case appeals to sympathetic feeling, 
but the law is the other way. 

Joseph Montgomery, for the executor, took no part in the 
argument, but stated that his client would not be sorry if what 
had been called the “common sense” view of the case should 
prevail. 

Meredith, in reply, argued that Loring v. Thomas covered 
the case, and had not been overruled. He referred to In re 
Metcalfe, [1909] 1 'Ch. 424, in which the Loring case was 
followed. 

April 18. Bovd, C. : — The 7th and 8th clauses of the will are 
these : — 

(7) After the death of my wife to sell property and pay to 
sister Naomi and to Mary $500 and to divide the remainder 
equally amongst all my brothers and sisters, including Naomi 
and Mary. 

(8) 'Should any of my brothers or sisters die before the final 
division of my estate leaving lawful issue then and in such case 
I desire that the share which such deceased brother or sister 
would have been entitled (to) if living shall be divided equally 
amongst the children of such deceased brother or sister so that 
such child or children shall take the portion which his or her or 
their parent would have been entitled (to) if living. 

Upon questions submitted to the Court touching the proper 
construction of John M. Denton’s will, the fifth one was this: 
Are the children of Naomi entitled to share, under the provi- 
sions of clause 8, in the remainder of the fund formed under 
clause 7 of the will ? 

The Judge’s answer is that these children are excluded. 
From this the present appeal is lodged. 

The important dates are these. The will of the testator was 
dated and made the 24th June, 1889. The sister of the testator, 
Naomi, died in 1892, leaving children. The testator died in 
1896. His widow died in 1910. At that time in 1910, his estate 
became finally divisible upon * the death of the life-tenant. 
Naomi died before this final division; she also died before the 
testator; but the important point which appears to have been 



XXVI.] 



ONTARIO LAW REPORTS. 



297 



passed by unconsidered is, that she was alive at the date of c - 

the will, and formed then one of the class capable of sharing in 

the residue, when it should fall to be divided. The learned Re Denton. 
Judge, applying the solvent of “common sense,” thought the Boyd. c. 
testator intended to benefit the children of Naomi, but was com- 
pelled by authority to decide the other way. But, bearing in 
mind the cardinal fact that the sister was alive at the date of 
the will, there appears to be comparative concord in the later 
case-law in favour of the bequest to the children being well and 
legally bestowed. 

Grant, M.R., in Christopherson v. Naylor, 1 Mer. 320 
(1816), laid down the proper method of inquiry. Who are the 
primary legatees? Who are capable of taking in the first place 
by the terms of the will? Having found these, then the repre- 
sentatives or issue of these are by the will made to stand as sub- 
stitutes in place of the original legatee who had died. Whether 
the time of death be before the death of the testator or the 
tenant for life or the period of distribution does not matter, so 
long as you find the primary legatee having capacity to take 
named in the will. This was in 1816 : and in 1843 an accur- 
ate Judge summarised the state of decision on this point 
in Gray v. Garman (1843), 2 Hare 268: “It has, indeed, been 
made a question, whether the capacity of the primary 
legatee (at the date of the will) to take the legacy was alone 
sufficient, whether such legatee must not survive the testator, 
become a legatee in esse, and not have been a legatee in 
posse only to entitle his issue to claim in substitution . . . 

But later cases appear to sanction a more liberal, though still a 
literal, construction of language like that I am considering. And 
it has been held, that the issue of a person primarily pointed 
out as the object of a testator’s bounty, and living at the date of 
the will, may take in substitution for that party dying in the 
lifetime of the testator” (citing cases) ; and the Vice-Chancellor 
(Wigram) ends by saying — “A construction which is certainly 
fortified by very important analogies:” p. 271. 

The gloss of Sir John Romilly in Ive v. King (1852), 16 
Beav. 46, at p. 53, cited in the judgment below, 25 O.L.R. at 
p. 511, and founded upon the cases he refers to, appears to be 



298 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. too wide: as Coulthurst v. Carter (1852), 15 Beav. 421, was a 

case where the parent was dead at the date of the will; so was 

Re Denton. Waugh v. Waugh (1833), 2 My. & K. 41; and so was Peel v. 

Boyd, c. Cailoiv (1838), 9 Sim. 372; and the last case cited by the Master 

of the Rolls, Romilly, Christopher son v. Naylor, I have already 
referred to as being on the same state of facts. Congreve v. 
Palmer (1852), 16 Beav. 435, was in like manner a case where 
the sister was dead at the date of the will, and had, therefore, 
no capacity to take and did not take by the terms of the will. 

In re Potter’s Trust, L.R. 8 Eq. 52, is quoted in the judg- 
ment under appeal, and 'Malms, V.-O., there affirms the law to 
be on reason thus : ‘ ‘ Wherever there is a gift to a class, with a 
gift by substitution to the issue or children of those who shall 
die, the children take what their parents would have taken if 
living at the testator’s death, without regard to the question 
whether the parents died before or after the date of tfye will.” 
That is an unquestioned statement of law, so far as relates to 
parents dying after the date of the will, but it has provoked con- 
troversy as to those who were dead at the date of the will. On 
this head it seeks to controvert Christopher son v. Naylor, but on 
this branch of the inquiry we have no concern in order to dis- 
- pose of the present appeal. The controversy is raised in In re 
Hotchkiss’s Trusts, L.R. 8 Eq. 643, 650: but the case itself is an 
express decision that where the gift is to a class of persons 
living at the date of the will, the children of those who died be- 
tween the date of the will and the testator are entitled. 

Thornhill v. Thornhill, 4 Madd. 377, is apparently an off- 
hand decision of the Vice-Chancellor, who had the reputation of 
determining without hearing, and is but meagrely reported. 
The case seems to have turned on the language of the will giv- 
ing the children the share of the parent ; and, as the parent died 
in the testator’s lifetime, he never had a share to transmit to the 
children; and on this ground it may be supported, and it is so 
treated by Mr. Theobald: see Theobald on Wills, 7th ed., p. 671. 
And he distinguishes it from cases where (as in the present will) 
what is given to the issue is the share or portion which a member 
of the class would have taken if he had lived, in which the sub- 
stitution operates as regards a person who dies in the testator’s 



XXVI.] 



ONTARIO LAW REPORTS. 



299 



life 'but who was alive at the date of the will. Thornhill v. D. c - 

Thornhill is approved and followed by North, J., in In re Han- 1912 

nam, [1897] 2 Ch. 39; but it has not otherwise been received Re Denton. 
with favour ; and both cases are any way clearly distinguishable Boyd. c. 
from this case, where the testator’s language expressly provides 
for the case of one dying before getting or being entitled to any 
share prior to the final distribution. 

The point is thus put by Kay, J., in In re Webster’s Estate 
(1883), 23 Ch. D. 737, 739: “ Where there is a gift to a class 
and then a substitutionary gift of the share of any one of the 
class who should die in the lifetime of the testator, no one can 
take under the substitutionary gift who is not able to predicate 
that his parent might have been one of the original class, and 
consequently if the parent was dead at the date of the will, 
and therefore by no possibility could have taken as one of the 
original class, his issue are not able to take under the substitu- 
tionary gift.” 

But I favour the construction of this will as one in which the 
gift is not strictly of substitutionary character, but as present- 
ing two classes of original legatees: one, the primary legatees, 
the brothers and sisters of the testator who are alive at 
the time of final distribution after the death of the testator’s 
wife ; the other, the secondary legatees, consisting of the issue or 
th'e children of any of the primary legatees who may die leav- 
ing issue before the period of final distribution. I would adopt 
and apply the language of Kindersley, V.-C., as used in Lan- 
phier v. Buck (1865), 34 L.J. Ch. 650, 656: “The gift is to 
two classes of objects, to such nephews and nieces as shall be 
living at a given time, and to the issue of such nephews and 
nieces as shall be dead at that time. Is that an original gift to 
the issue, or a gift by substitution? Clearly an original gift to 
them. It is true you may say in a sense they are substituted 
for their parents, because they take the share respectively 
among them which their parent would, if he had come under 
the first , class, have himself taken, and in that sense (but that 
is not the accurate and proper sense) you may say that there is 
a substitution ; but it is as much an original gift to the issue of 
such of the nephews and nieces as shall have died before the 



300 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

He Denton. 

Boyd, 0. 



tenant for life” (or the period of distribution) “as it is an orig- 
inal gift to such of the nephews and nieces as shall be living at 
the death of the tenant for life” (or other fixed period). 

I find no authority preventing us from giving effect to the 
clear and obvious meaning of the testator, that the children of 
his sister should take the share intended for their parent had she 
been alive. The whole field of testamentary interpretation in 
this regard has been broadened, and, if I may say so, humanised, 
by the exposition of the subject by the Lords in Barraclough v. 
Cooper (1905), as reported in a note to the case of In re Lam- 
bert , [1908] 2 Ch. 117, at pp. 121-126. They repudiate any 
canon of construction beyond the fact that enough is found 
in the language of the instrument to shew what was the mean- 
ing of the testator. And Lord Macnaghten quotes with emphatic 
approval the words of Vice-Chancellor Kindersley in Loring v. 
Thomas, 1 Dr. & Sm. 510, as follows : ‘ ‘ Now, of course the ques- 
tion is one of intention, and it is obvious that in cases of this 
kind a testator may mean to include as objects of his bounty, or 
he may mean to exclude, the issue of the predeceased children. 
When a testator directs that issue shall represent or stand in the 
place of or be substituted for a deceased child, and take the 
share which their parent would have taken if living, he may 
intend such representation or substitution to apply only to the 
case of the child dying subsequently to the date of his will and 
before the time of his own death; or he may mean it to extend 
also to the case of the child who was already dead at the date 
of the will. The solution of the question, which of the two he 
intended, must of course depend on the language he has used 
in indicating such representation or substitution. He may use 
language of such restricted import as to be inapplicable to any 
children but such as are living at the date of the will. But if 
he uses language so wide and general as to be no less applicable 
to a predeceased child than to a child living at the date of the 
will, then the direction as to such representation or substitution 
must be held to embrace both. ’ ’ 

The House of Lords have in effect given their sanction to 
the vigorous words of James, V.-C., in Habergham v. Ride- 
halgh (1870), L.R. 9 Eq. 395. He says (p. 400) : It was con- 



XXVI.] 



ONTARIO LAW REPORTS. 



301 



tended by Mr. Kay that a gift to A., and a class of persons, is H 0. 

also a gift to a class, and that with regard to that class this rule 

has been laid down: that in order to determine the class you Re Dentox. 
must take the persons who answer the description at the death Boyd, c. 
of the testator. That implies that Where there is a gift to a 
class, that means a gift to such of the class as shall be living at 
the death of the testator; and it follows that no one member 
of the class who may have died in the lifetime of the testator 
will be entitled. That reasoning is a very good illustration of 
the process by which in this Court we have established a body of 
dogma, and developed a whole code of artificial rules, according 
to which a testator's will is treated as if it were something 
written in cypher, and incapable of being construed except by 
those learned persons who have the key of the cypher. Never- 
theless, sometimes the Court is enabled to determine questions 
arising upon wills according to the rules of common sense ; either 
by playing off one rule against another, or by resorting to some 
general rule of construction which controls the rest.” And the 
Vice-Chancellor proceeds to act accordingly. 

A case of Re Fleming, 7 O.L.R. 651, decided by Mr. Justice 
Street, supports the view taken on this appeal. 

I agree with my ‘brother Riddell as to the meaning of the 
testator; and I do not read the authorities cited as going to 
interfere with the operation of common sense in the construc- 
tion of the testator’s language. 

I rather favour giving costs of this appeal out of the estate. 

Latchford, J. : — I agree. 

Middleton, J. : — I entirely agree. Lindley, L. J., in In re 
Palmer, [1893] 3 Ch. 369, in dealing with a case where the Judge 
of first instance had thought that he was precluded . by prior de- 
cisions from giving effect to the testator’s intention, uses words 
peculiarly apt here (p. 373) : “The result in all these cases 
has been, in my opinion, to miss the intention as expressed, and, 
unfortunately, to defeat it without sufficient grounds. This line 
of cases affords a striking illustration of the mischief done by 
construing one will by paying too much attention to decisions on 



21 — XXVI. O.L.R. 



*3 P O 

UvyU 

D. C. 
1912 

Re Denton. 

Middleton, J. 



ONTARIO LAW REPORTS. [voi, 

other wills. Rules of law must be attended to ; hut if in any case 
the intention of a testator is expressed with sufficient clearness 
to enable the Court to ascertain it, the Court ought to give effect 
to it in that case, unless here is some law which compels the 
'Court to ignore it; and the mere fact that in other wills more 
or less like it other Judges have not been satisfied as to the inten- 
tions expressed in them, is not sufficient ground for defeating 
an intention where the Court holds it to be sufficiently expressed 
in the particular will which it is called upon to construe.” 

Quite apart from cases, the language of the testator here ad- 
mits of no possible doubt. The testator has directed the pro- 
perty to be set apart and held during the lifetime of his wife. 
Upon the death of the wife, it is then to be divided equally 
amongst all his brothers and sisters, including Naomi Dicken- 
son, who is expressly named;' and the testator then provides that, 
should any of his brothers or sisters die before the final division 
of his estate, leaving lawful issue, the share which the deceased 
brother or sister would have been entitled to, if living, shall go 
to the children of the deceased brother or sister. 

The will as to persons speaks from its date. Naomi died 
during the testator’s lifetime. I can find no warrant for read- 
ing into this will a provision which would exclude her children 
from sharing because she predeceased the testator. This would 
be clearly contrary to the express intention of the will. The 
analysis of the cases by my Lord makes it plain that there is no 
authority compelling us to do violence to the testator’s language 
and frustrate his intention. 

Appeal allowed ; costs out of the estate. 



\ 




XXVI.] 



ONTARIO LAW REPORTS. 



303 



[DIVISIONAL COURT.] 
Underwood v. Cox. 



Contract — Family Settlement — Unfounded Claims — Fraud and Misrepresen- 
tation — Inducement for Executing Document — Threats — Absence of In- 
dependent Advice — Evidence — Threatening Letter Written “without 
Prejudice ” pendente Lite — Admissibility. 

The defendant, who was the principal beneficiary under the will of her 
father, made an agreement with the plaintiffs, her brother and sister, 
and with another sister, by which she covenanated to pay over to them 
the greater part of what she was to receive under the will. One of the 
plaintiffs had opposed the granting of probate of the will, and had filed 
a caveat ; and the agreement purported to be by way of compromise or 
settlement of the plaintiffs’ claims to the estate: — 

Held, in an action to enforce the covenant, that, upon the evidence, the 
plaintiffs had no grounds for attacking the disposition of his property 
made by the father, and that the defendant was in fact induced, by 
threats made by her brother, one of the plaintiffs, to execute the agree- 
ment, without competent independent advice and under pressure of the 
threats ; and, therefore, the agreement was not enforceable. 

A letter written to the defendant by her brother above-mentioned, pendente 
lite, and containing veiled threats, though purporting to be written 
“without prejudice,” was admitted as evidence for the defendant. 

Pirie v. Wyld (1886), 11 O.R. 422, followed. 

Judgment of Kelly, J., reversed. 

Action to recover $964.70 and interest upon a covenant in 
an agreement. 

January 17, 18, 19, and 26. The action was tried before 
Kelly, J., without a jury, at Toronto. 

R. TJ. McPherson and J. W. McCullough , for the plaintiffs. 

O'. Waldron , for the defendant. 

February 28. Kelly, J. : — This action is brought by Wil- 
liam J. Underwood and his sister, Catharine Laurie, against 
their sister, Jane Cox, for payment of $964.70 and interest, 
claimed as their two-thirds share of an amount agreed by the 
defendant to be paid to the plaintiffs and another sister, Mary 
Ann Cox, by an agreement dated the 5th May, 1910. 

The defence set up is, that the defendant was induced to 
sign the agreement by the misrepresentation, fraud, intimida- 
tion, duress, and undue .influence of the plaintiff Underwood 
and Joseph Laurie, husband of the plaintiff Laurie, and that 
she signed it without knowing its contents and without legal 
advice as to her rights. 



D. C. 
1912 

Feb. 28. 
April 18. 



304 



ONTARIO LAW REPORTS. 



[VOL. 



The parties to the agreement are children of Francis Under- 
wood, deceased, who by his will, dated the 2nd August, 1902, and 
a codicil thereto, dated the 1st March, 1905, gave to Ida Frances 
Cox, the minor daughter of the defendant, an organ and a 
mortgage which he held for $1,000 on the property of the defen- 
dant and her husband, and all the rest of his estate to the 
defendant. 

The testator died on the 27th March, 1910 ; and his executors 
applied for probate of the will; the plaintiffs and Mary Ann 
Cox filed a caveat against the issue of probate, alleging that 
the will was not executed by the testator, or, if so, that it was 
executed under undue influence and duress, and that he was not 
of sound mind, memory, and understanding. 



D. C. 
1912 

Underwood 

v. 

Cox. 
Kelly, J. 



The real ground, however, of the plaintiff Underwood’s ob- 
jection to the disposition made by the testator of his estate is 
found in the claim which he had, or believed he had, against the 
testator and his estate, arising out of an agreement or under- 
standing between the father and son. Several years prior to his 
death, the father obtained from the son a conveyance of certain 
property, at a price much less than its real value, on the promise 
that, at his death, the son would be given a substantial part of 
his estate. The son honestly believed that he was entitled to 
enforce this claim against his father’s estate, or to share in the 
assets of the estate ; he also claimed the organ which his father 
bequeathed to the defendant’s minor daughter, and which, the 
evidence shews, had been at some time looked upon as belonging 
to him. The claim of the plaintiff Catharine Laurie was, that 
she had been promised by her father consideration for having 
nursed and cared for him for a considerable time prior to his 
death, and that the estate was, therefore, indebted to her. Mary 
Ann Cox, the other party to the agreement sued on, is not a 
party to these proceedings; it was stated by the defendant’s 
counsel, during the progress of the trial, that she was not press- 
ing her claim. 

On the 4th May, 1910, the plaintiff Underwood, who lives in 
London, went to the defendant’s residence in the township of 
Markham, and, during an interview of considerable length, pro- 
posed a settlement. The defendant’s husband, Walter Cox, was 



XXVI.] 



ONTARIO LAW REPORTS. 



305 



not present; and Underwood, after stating to the defendant why L^C. 

he claimed to be entitled to a settlement, named an amount — _ 

which would be accepted for the plaintiffs and Mary Ann Cox Underwood 
in full, the terms proposed being exactly those which were after- Cox. 
wards embodied in the agreement sued upon. The defendant, as Keiiy, j. 
was natural, said that she wished to talk it over with her hus- 
band; and Underwood left the house with the understanding 
that he would return next day for her answer. 

On the 5th May, Underwood, accompanied by Joseph Laurie, 
husband of the plaintiff Catharine Laurie, returned to the de- 
fendant’s house, and had a further interview with the defen- 
dant and her husband. The proposal made on the day previous 
was fully and freely talked over and considered by those pre- 
sent, and the defendant and her husband decided to accept it; 
and it was suggested by the defendant ’s husband that the plain- 
tiff Underwood draw the agreement to carry out the settlement. 

This Underwood refused to do. It was then suggested, and, so 
far as the evidence shews, by the defendant, that Underwood, 

Walter Cox, and Laurie go to one of the executors, who lived 
near by, and have him draw the agreement. They went. The 
executor also refused to draw it, and suggested the parties going 
to Markham to have it drawn by a solicitor. These same three 
persons went together to Markham, a distance of five and a half 
miles, and instructions were given to a solicitor to prepare the 
agreement, on the terms which had been agreed on at the de- 
fendant ’s house, all three being with the solicitor when the 
instructions were given. 

The plaintiff Underwood and the defendant’s husband re- 
turned to the defendant’s house with the agreement, which, on 
the way from the solicitor’s office, had been signed by Mary 
Ann Cox. 

The defendant did not then read the agreement, but she 
admits that she understood the proposal for settlement, made 
by her brother on the 4th, and discussed by the parties as- 
sembled at her house on the 5th. There is no doubt, and the 
defendant admits it, that the agreement is in the exact terms 
then proposed. Under these circumstances, its not having been 
read over at the time of its execution is not a ground for re- 



306 

D. C. 
1912 

Underwood 

v. 

Cox. 

Kelly, J. 



ONTARIO LAW REPORTS. [vol. 

pudiating the agreement: North British B.W. Co. v. Wood 
(1891), 18 Ct. of Sess. Cas. (4th series) 27. 

The defendant shewed some hesitation about signing, and the 
plaintiff Underwood said to her: “Now, Jane, you do not need 
to sign that paper, and don’t sign it unless you feel that you are 
giving what you feel that I should have; I consider this is a 
just claim, and if you don’t consider so, don’t sign that paper.” 
And, further, “You don’t have to sign it.” 

The defendant’s husband then said, “What will happen if 
she don’t sign it?” Underwood replied, “We will let it stand 
on its own merits, will let the case stand on its own merits, and 
the case will settle itself.” 

At the trial it was admitted that there was no duress; and 
there was no evidence of it; but it was attempted to be shewn 
that there was fraud and misrepresentation on the part of the 
plaintiff Underwood, and that he had intimidated the defen- 
dant and obtained undue influence over her. 

The evidence does not satisfy me that these contentions are 
well founded. I do not find that the plaintiff Underwood or 
Joseph Laurie made any misrepresentations to or perpetrated 
any fraud upon the defendant; nor do I think that any fidu- 
ciary relationship, or relationship of confidence, existed or was 
established between these parties such as would justify the as- 
sumption of undue influence; nor is there any evidence of in- 
timidation. 

The defendant alleged that she was in a weak state of health, 
that she had no independent advice, and that she was unduly 
pressed by the plaintiff Underwood, and was hastened into the 
settlement. 

It is true that she was not then in the best of health, but she 
was not so unwell as not to be able to attend to her household 
duties, which she was doing unaided at that time, including the 
preparation pf dinner for those who assembled at her house on 
the 5th May. She was not unduly pressed or hurried into the 
settlement. When, on the 4th May, she expressed her desire to 
be given until the following day to consult with her husband, 
her brother readily consented. She had from some time on the 
4th May until the afternoon of the 5th May to confer with her 






XXVI.] 



ONTARIO LAW REPORTS. 



307 



husband, and obtain other independent advice, had she desired to 
do so; and I do not find that any circumstances arose which 
threw the burden on the plaintiffs of doing more than they did. 
See Wallis v. Andrews (1869), 16 Gr. 624, at p. 640. 

In Harrison v. Guest (1856), 2 Jur. N.S. 911, the Lord 
Chancellor held the absence of professional advice no objection, 
when the party dealt with did not occupy a fiduciary relation- 
ship. It was also there laid down that the burden of proof is 
on the party seeking to set aside the transaction to shew that he 
has been imposed on, and it is not for him to say, “I had no pro- 
fessional advice,” unless he can shew that there has been con- 
trivance or management on the part of the person who was 
dealing with him, and whose transaction is sought to be set aside,, 
to prevent him having that advice. 

Nothing has happened in this case to throw that burden on 
the plaintiffs. 

The defendant endeavoured to shew that the plaintiff Under- 
wood had used an incident in her early life as a threat to compel 
her to make the settlement. I do not find this to have been the 
fact. The defendant’s evidence is, that she did not know if her 
brother knew of this incident, that he had never mentioned 
it to her, and when she herself mentioned the subject on the 4th 
May, she cannot remember his making any reply. Her brother 
denies having alluded to it. 

It was argued on behalf of the defendant that the filing of 
the caveat was not the proper procedure by which Underwood 
could establish his claim. He, however, believed that whatever 
procedure was adopted by his solicitor in London, who prepared 
the caveat, was the necessary procedure by which to establish 
his claim. 

The settlement was, to my mind, deliberately made ; and the 
fact that one party to it afterwards became dissatisfied with it, 
is not of itself a sufficient reason for seeking to be relieved from 
it. In many instances, compromises or settlements are entered 
into which are at the time not altogether satisfactory to one or 
other of the parties, but which they, nevertheless, enter into so 
as to avoid the expense and anxiety attendant on litigation, or 



D. C. 
1912 

Underwood 



v. 

Cox. 



Kelly, J. 



308 

D. C. 
1912 

Underwood 

v. 

Cox. 

Kelly, J. 



ONTARIO LAW REPORTS. [vol. 

to settle doubtful claims, or for some such consideration, and 
the Courts uphold these compromises or settlements. 

It is not unusual for a compromise to be effected on the 
ground that the party making it has a chance of succeeding in 
it ; and, if he Iona fide believes he has a fair chance of success, 
he has a reasonable ground for suing, and his forbearance to sue 
will constitute a good consideration: Callisher v. Bischoffsheim 
(1870), L. R. 5 Q.B. 449; Miles v. New Zealand Alford Estate 
Co. (1886), 32 Ch.D. 266. 

These plaintiffs not only believed that they had a chance of 
success, but there is nothing in the evidence to shew that their 
claims were, in their minds, at least, other than honest ones, or 
that they were otherwise than honestly made. By the agreement 
sued upon, they and Mary Ann Cox, in consideration of the pay- 
ment which the defendant agreed to make, released their 
father’s estate from all claims which they had against it, and 
withdrew, without costs, the caveat. 

After a careful consideration of the evidence, I can only 
conclude that the plaintiffs are entitled to succeed. There will, 
therefore, be judgment in their favour for the amount prayed 
for and costs. 

The defendant appealed from the judgment of Kelly, J. 

April 4. The appeal was heard by a Divisional Court com- 
posed of Boyd, C., Latchford and Middleton, JJ. 

G. Waldron, for the defendant, argued that the learned trial 
Judge erred in the following findings : that the plaintiff Under- 
wood did not make any misrepresentation to the defendant ; that 
his real ground of objection to the will was in the claim which 
he had against his father ’s estate ; that there was no evidence 
of intimidation ; that no fiduciary relationship or relationship of 
confidence existed between these parties such as would justify 
the assumption of undue influence; that the defendant’s health 
was not such as to interfere with her power to contract ; that the 
absence of professional advice was not objectionable; that the 
plaintiff Underwood had not used an incident in the early life 
of the defendant as a threat to compel her to make a settlement ; 
that the agreement was deliberately made ; that the plaintiffs 



XXVI.] 



ONTARIO LAW REPORTS. 



309 



believed they had a fair chance of success. Counsel contended, U. c - 

on the contrary, that there was fraud and overreaching on the 

part of the plaintiff Underwood; that there was a fiduciary Underwood 

v. 

relationship or relationship of confidence between the plaintiff cox. 
Underwood and the defendant; that there was evidence of in- 
timidation; that the plaintiff Underwood did use an incident in 
the early life of the defendant as a threat to compel her to make 
a settlement ; in fine, that the bargain was not a compromise of 
a dispute at all, but a surrender by the defendant through fear 
of Underwood’s betrayal of a family secret, and should not be 
enforced. The learned trial Judge should have admitted in 
evidence a letter written by the plaintiff Underwood from Lon- 
don in November, 1911. Though written “ without prejudice,” 
it was not a privileged document, because it contained threats, 
and was not written for the purpose of a bona fide offer of com- 
promise : Kurtz and Co. v. Spence and Sons (1888), 58 L.T.R. 

438, at p. 441; Phipson on Evidence, p. 211; Pirie v. Wyld 
(1886), 11 O.R. 422. In support of his contentions counsel 
also referred to the following authorities: Cadaval v. Collins 
(1836), 4 A. & E. 858; Huguenin v. Baseley (1807), 14 Ves. 273, 
at p. 287 ; Gordon v. Gordon (1816), 3 Swanst. 400; Hoghton v. 

Hogliton (1852), 15 Beav. 278; In re Roberts, [1905] 1 Ch. 704; 

Tennent v. Tennents (1870), L.R. 2 Sc. & D. 6-Hartopp v. Har- 
topp (1856)., 21 Beav. 259; Ellis v. Barker (1871), L.R. 7 Ch. 

104; Boyse v. Bossborough (1856), 6 H.L. C. 2; Allcord v. Skin- 
ner (1887), 36 Ch. D. 145, at p. 171; Stapilton v. Stapilton 
(1739), 1 Atk. 2; McCaffrey v. McCaffrey (1891), 18 A.R. 599; 

Trusts and Guarantee Co. v. Hart (1900), 31 O.R. 414, at p. 

420; Gissing v. T. Eaton Co. (1911), 25 O.L.R. 50. 

R. TJ. McPherson and J. W. McCullogh, for the plaintiffs, 
contended that the learned trial Judge was right in his findings, 
and that his judgment should be affirmed. They denied that the 
evidence shewed any fraud or overreaching or intimidation, or 
that any fiduciary relationship existed ^between the plaintiff 
Underwood and the- defendant such as would justify the as- 
sumption of undue influence. Therefore, the absence of profes- 
sional advice was no objection: Harrison v. Guest, 2 Jur. N.S. 

911. The plaintiff Underwood did not use an incident in the 



310 



ONTARIO LAW REPORTS. 



[VOL. 



D - C. early life of the defendant as a threat to compel her to make a 

1912 settlement. The settlement was deliberately made, and the fact 

Underwood that one party afterwards became dissatisfied with it was not 

V. 

Cox. a sufficient reason of itself to he relieved from it. The bargain 
was a fair compromise, as the plaintiffs believed that they had 
a fair chance of success : Callisher v. Bischoffsheim, L.R. 5 Q.B. 
149; Miles v. New Zealand Alford Estate Co., 32 Ch. D. 266. 
The learned trial Judge was right in refusing to admit in evi- 
dence the letter of November, 1911, as it was a privileged com- 
munication : Kurtz and Co. v. Spence and Sons, 58 L.T.R. 438. 

Waldron, in reply. 



April 18. Boyd, C. : — This appears to be a nefarious trans- 
action, though its real import was obscured at the trial by 
reason of the rejection of evidence. Had the letter written by the 
plaintiff Underwood to the defendant pendente lite been admitted 
and considered by the learned trial Judge, I do not doubt but 
that he would have arrived at a conclusion diametrically opposite 
to that now under appeal. He was impressed favourably with the 
appearance of the plaintiff Underwood, but his own letter shews 
to what unworthy means he will stoop to serve his own ends. 
The dispute falls to be decided (as I take it) mainly, if not 
entirely, on what occurred during the firs! interview of one 
hour between brother and sister (the said parties) on the 4th 
May, 1910, when he made the claim which was afterwards 
given legal effect to by the writing under seal which is the foun- 
dation of this suit. But to understand the situation it is needful 
to refer to what is in evidence and to the prior sequence of 
events. 

The first group relates to the plaintiff Underwood’s claim 
of unfair treatment by his father. This claim, vague at best, 
looms up more largely at the trial than elsewhere. It was 
not known by or* disclosed to the defendant; and, even 
now, it is difficult to find out coherently any claim from the 
evidence. But, so far as it has substance, the situation is 
and it rests entirely on the recollection and good faith 
credibility of the plaintiff Underwood — with no scrap of wr 
to assist, but all the writings making against him. 




XXVI. ] 



ONTARIO LAW REPORTS. 



311 



The lot named in the will, N. part of lot 18 (fifty acres) in D - c - 

the 4th of Scarborough, was, the plaintiff Underwood says, 

originally owned by his mother. She died in 1885, without a Undebwooh 
will, leaving the father, this son, and four sisters, of whom the Cox. 
youngest, the defendant, Jane, was under age. It is said that Boyd> c 
the mother intended that the son should get this lot, and it is 
said that the father got the sisters to sign off their claims, with- 
out consideration, in favour of the plaintiff Underwood. It is 
said that the plaintiff mortgaged for $500, with which money he 
went into business, without much success apparently. Then 
the father asked the son to sell him the lot, and the son wanted 
for his interest therein $3,500, hut the father would give no 
more than $2,000, and this the son took, on the father saying 
that the son would get a share with the rest of them when he 
divided — this being taken to mean, “when he died.” The son 
contradicts himself as to whether the father paid $2,000 and 
assumed the mortgage for $500, or whether the mortgage was 
to be paid out of the $2,000. This occurred in 1888. This man- 
ner of claim was not explained to the sister when the alleged 
settlement took place in 1910. He gives it in his evidence in 
chief thus: “I said I felt I had not got from the estate what I 
should have got, that my father had not left me what I was 
promised, what I felt I should have; she said she had nothing 
to do with that part of it as to what I got or should have got.” 

“Then I asked her, in view of the circumstances, her knowing 
how the property was made and got together, and how I stayed 
at home till I was twenty-three, I felt it was due her to make 
good the money, as she was evidently the only beneficiary under 
the will, that I should have a certain amount and that Mary 
Ann and Catharine should have something.” 

To follow the history of this lot after the son conveyed to the 
father. In 1902, the father called upon Mr. Holmes to draw 
the papers conveying this lot to his daughter Jane and her 
husband, Walter Cox, and to draw a mortgage, on the 26th 
July, 1902, for $1,000, upon the lot, from the Coxes, payable to 
the father at the end of fourteen years, with interest at two and 
a half per cent. This was subject to a first mortgage from the 
father to George Morgan (probably an executor) for $1,500. 



312 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Underwood 

v. 

Cox. 

Boyd, C. 



Mr. Holmes says that the mortgage was drawn expressly for the 
purpose of being left to the child (Ida Prances). According to 
the statement of the plaintiff Underwood, this farm was worth 
about $5,000, and they were to give $4,750 for it; of which 
$1,500 was paid by the defendant. There was also the mortgage 
for $1,000 ; and, if it was subject to another mortgage for $1,500, 
that would total $4,000. And the plaintiff omits to tell that his 
sister Jane relinquished her share in the lot originally when it 
was conveyed to the plaintiff — worth several hundred dollars. 
The rest of the sisters got $2,500 each from the father during 
his life. 



The next group relates to the will of the father. 

The father died at the home of the plaintiff Catharine 
Laurie, on the 27th March, 1910. His will weis made on the 2nd 
August, 1902, pursuant to instructions given to the well-known 
lawyer Mr. Holmes, who drew it and was one of the subscribing 
witnesses. He gives to his daughter Mary Ann Cox and her 
husband the north half of lot 19 in the 4th of Scarborough, being 
100 acres. To his daughter Fanny Newell, a small lot contain- 
ing one-eighth of an acre alongside the north fifty acres of lot 
18, conveyed to Jane and her husband. To Prances Cox, 
daughter of his daughter Jane, he gives the organ and also the 
mortgage for $1,000 made by his daughter Jane to the testator, 
and drawn less than a week before the will. 

Nothing is given to his son Richard and daughter Catharine, 
as he had advanced them a sufficient portion (the plaintiff Un- 
derwood’s name is not mentioned), and the residue of the estate 
goes to Jane Cox. 

There was a codicil to this, drawn after it because of the 
death of Fanny Newell on the 1st March, 1905, when the testa- 
tor was living with his daughter Catharine, whereby the small 
lot of one-eighth of an acre was given to his daughter Jane, 
the defendant. This codicil was drawn by Mr. Holmes’s partner, 
Mr. Gregory, and by him also witnessed. The defendant was 
too ill to attend the funeral, but the plaintiff Underwood was 
there, and then found out from the Lauries that a will had been 
made. The matter was talked over with the. sister Catharine, 
and they were disturbed about the way the property was left, 



XXVI.] 



ONTARIO LAW REPORTS. 



313 



•and about Ida the little girl securing the mortgage for $1,000. D - c - 

1912 

The plaintiff bespoke a copy of the will, and returned to his home 

at London. He writes a letter on the 24th April, 1910, to the Underwood 

V. 

executor George Morgan urging the forthcoming of a copy of the Cox. 
will, in which he says : 4 ‘ All the information I have is from the BoydTa 
Lauries to the effect the youngest girl (i.e., defendant) in the 
family and her daughter comes in for the entire estate. And it 
is my opinion (sic) to go thoroughly into the matter before 
allowing the matter to be settled.” 

The plaintiff repairs to Mr. Beattie, solicitor in London, 
and procures the filing of a caveat on the 26th April, 1910, on 
behalf of the plaintiff and the two sisters Mary and Catharine. 

It is not clear what he told this solicitor as to the grounds of 
attack ; at p. 122 of the evidence he says : ‘ ‘ One of the grounds was 
his own promise before a witness that I was to have a share in the 
estate.” And there is this further from his examination for 
discovery: “Q. And your solicitor did not think that would be 
a ground for setting aside the will? A. I do not think I asked 
him that. I thought possibly that would be a ground for setting 
aside the will ... I 'did not go into the question of my rea- 
sons for the caveat to J ane. ’ 9 However, the caveat does set forth 
as grounds that the alleged will was not executed by the testator, 
or, if executed, it was so by means of duress and undue influence 
exercised over him, and that he was not of sound mind, memory, 
and understanding. The plaintiff says the caveat was filed 
because “he felt that he had not got what he felt was just out 
of the estate.” 

A warning was given on behalf of the executors on the 27th 
April that the contestant was to appear within ten days after 
service, failing which the Court would proceed in the pre- 
mises: that would allow him till the end of the first week in 
May to act. Accordingly, on the 3rd May he visited Mr. Gre- 
gory, solicitor for the executors, and the caveat was discussed 
and the will, and he asked information, speaking something of 
the father and saying the will was not fair. Mr. Gregory in- 
formed him that there was no doubt about the validity of the 
will or codicil or of the capacity of the testator. He and his 
partner Mr. Holmes had known the testator well for years, and 



314 

D. C. 
1912 

Underwood 

v. 

Cox. 

Boyd, C. 



ONTARIO LAW REPORTS. [vol. 

the plaintiff admits that he was told emphatically that there 
was no cause for breaking the will. 

The plaintiff had visited his father in 1909, and found him 
robust and strong-minded, and that was his last visit. 

These are the facts, which shew a perfectly hopeless case for 
attacking the disposition of property made by the testator, either 
on the grounds set forth in the caveat or upon the vague oral 
intimation alleged to be given by the testator, a quarter of a 
century before his death, that he would leave the son something 
by will. How then does it come that the defendant appeared 
willing to settle the plaintiffs’ claims by paying $1,400? It is 
to be noted that Mary makes no claim on the estate and takes 
no part in this litigation ; and, further, that the alleged claim of 
Catharine for nursing was not in any way referred to before 
the defendant, it being supposed and believed that she (Catha- 
rine) had been paid by the testator all that he had promised to 
pay her — at so much per week. This apparent family compro- 
mise turns out to be really a surrender by the defendant, at the 
bidding of the plaintiff, because of his knowledge and use of a 
family secret. That secret may be revealed by the use of the 

plaintiff’s own words in the letter dated “Nov. , 1911,” 

written to the defendant after he had been examined for dis- 
covery in this action: — 

“I am going to use what evidence I can get to shew that I 
had good reasons to enter a caveat against the will. . . . 

You know that my father was induced to make his will in the 
way he did just because of that child that Walter declared did 
not belong to him, and my father told us when he lived with us 
in Uxbridge that the child did not belong to Walter, and did 
not look like him, and went so far as to hint pretty loudly who 
it did belong to, and there are others in Scarborough who will 
be brought to tell what they know. 

“You will remember that I was in Scarborough that day 
that Walter laid drunk on the side of the road after being up 
at Markham, and threatened to leave you, and you know his 
reasons, and he told them to some others in Scarborough. . . . 
A ll I want is my rights. ’ ’ 

This precious epistle was enclosed in an envelope and 



XXVI. ] 



ONTARIO LAW REPORTS. 



315 



addressed to Mrs. Jane Cox, and marked “personal,” with a D - c - 

double injunction, marked on the envelope and written again on 

a strip of paper, to the post master, “Please see that the enclosed Underwood 
letter is given to no one else but to Mrs. Dox,” and the whole cox. 
put into an envelope addressed to the post master at Malvern. B ^Tc 
This outside envelope is stamped as of the 24th November at 
Malvern, and as of the 25th November at London, where it was 
posted. This letter begins “Dear Sister Jane” and ends 
“Your Bro. Will,” and has at its opening “Without prejudice 
The plaintiff has some knowledge of the niceties of law, such as 
that he should not draw an instrument of which he gets the 
benefit, and he doubtless thought that this would he a secret 
» missive not to be revealed or used against him in Court. And 
he hoped, no doubt, that it would work no less efficaciously in 
writing than if given by hint or word of mouth. But the ! 
authorities shew that this kind of letter, containing threats not 
written for the purpose of a bond fide offer of compromise, is not 
within the category of privileged documents. 

On grounds of public policy, letters written without pre- 
judice and written bond fide to induce the settlement of litiga- 
tion, are not to be used against the party sending them. But, 
when the letter embodies threats if the offer be not accepted, it > 
is in the interests of justice that such tactics should be exposed, 
and no privilege protects : Kurtz and Co. v. Spence and Sons, 

58 L.T.R. 438, 441; Phipson on Evidence, p. 211; Pirie v. Wyld, 

11 O.R. 422. 

A critical point in the case was reached at the beginning of 
the cross-examination of the plaintiff. I quote : ‘ 1 You said you 
never made any threats to this woman? A. I never made any 
threats. Q. You did not make any threats on the 4th or 5th 
May? A. Oh, no. Q. Or on any other occasion? A. Threats — 
no, sir.” Then counsel calls for the letter, but further question- 
ing is frustrated by the ruling that it was not admissible. Now 
this letter, when looked at and read on this appeal, is fatal to the 
plaintiffs’ success. The trial Judge, believing the answers made 
by the plaintiff Underwood, gives judgment in the plaintiffs’ 
favour. But this letter is full of threat and menace of the basest 
kind ; and so his answers must be discredited, for this letter dis- 



316 



ONTARIO LAW REPORTS. [vol. 



D. C. 
1912 

Underwood 

v. 

Cox. 
Boyd, C. 



closes his threats, and therein stamps him as untruthful, and its 
contents reveal that he is also unscrupulous. 

Leaving Mr. Gregory on the 3rd May, the plaintiff paid his 
visit to the defendant — and this visiting her was a new thing 
that had not happened before — on Wednesday the 4th May, 
1910. She had heard nothing about the will from the plain- 
tiff or her sisters, but it appears that the solicitor of the execu- 
tors, Mr. Gregory, had, with the executor Morgan, called on 
her in the early part of April to see about the details of the 
estate with a view to obtaining probate. The affidavit of the 
other executor, Wyper, as to value, was made on the 20th 
April. Mr. Gregory says that he found her at the time of his 
visit in a “very frail condition. ” She had been married about 
thirteen years, and had children other than the one who takes 
under the will the mortgage intended for her by the testator — 
her grandfather — notwithstanding and perhaps because of his 
knowledge of the stigma which attached to her birth. The plain- 
tiff, being asked, identified her thus: “Q. And that is the girl 
that was born as the result of something being up with the 
mother? A. That is the girl.” The allusion is to the expression 
used by the mother in giving the scraps which she was able 
to recollect of this private one hour’s interview with her brother 
on the 4th May. I quote : ‘ ‘ He told me he had stopped the busi- 
ness. . . . He said that I knew why my little girl got the 

money left to her (i.e., the $1,000 mortgage). I said, 'Was it 
because there was something up with me when I was married ? ’ ” 
At this stage of the examination and often afterwards she 
failed to remember what he said as to that and to other matters 
germane to it. No one can tell the strain put upon her by the 
exposure in public Court: she felt tired and faint, and finally 
collapsed, and the 'Court adjourned early. It is to be regretted 
that, on the resumption of the case next morning, she had not 
been asked to put in writing in Court what she remembered, but 
this was not done, and she was overwhelmed with varied ques- 
tions, which, far from helping, only hindered and embarrassed 
her. On the other hand, the plaintiff answered evasively and 
‘ ‘ hedged ’ ’ on the different occasions when his cross-examination 
was nearing this critical point. As a short sample I put in a 



XXVI.] 



ONTARIO LAW REPORTS. 



317 



page which exemplifies his manner of answering while being 
examined for discovery: — 

127. Q. You did not tell her the grounds upon which you 
were going to break the will if she did not give in now ? A. No 

128. Q. You told her that you were going to fight it? A. Yes. 

130. Q. You know the history of the little girl? A. Of the 
granddaughter ? 

131. Q. Yes, of your niece? A. I know partly the history 
of it. 



D. C. 
1912 

Underwood 

v. 

Cox. 

Boyd, C. 



132. Q. Say yes or no ? A. If I could tell how children come 
in every family, I could tell you ;• I know the child was born. 

133. Q. Did you make use of that in talking with your poor, 
feeble, consumptive sister? A. She is not consumptive. 

134. Q. Weak lunged; did you make use of that? A. Her 
name was mentioned as receiving a thousand dollars, which she 
should not have. I made use of it in that way, that she got a 
thousand dollars that the rest of the family should have, I did 
make use of that. 



135. Q. Did you talk with poor Jane about what would 
happen if you smashed this will which your father had made? 
A. What would happen? 

136. Q. How the property would go if you smashed the 
will? A. I guess I did. 

137. Q. What did you tell her? A. If the will was broken, 
then we would share and share alike — I think that is what I 
told her. 



138. Q. Did you tell her that your proposition was a little 
better for you and Mary Ann and Catharine than that? A. I 
do not think so, because it would not have been. 

140. Q. Did you say what would happen to the little girl if 
the will was broken? A. That that thousand dollars which she 
was to get would go to the rest of us, yes. 

141. Q. Did you play upon the mother’s timid horror of 
publicity? A. I do not think so. 

142. Q. Did you play upon the fear of the woman who has 
made a mis-step and who was your own sister ? A. Only as I 
am mentioning here. 



22 — XXVI. O.L.R. 



318 



ONTARIO LAW REPORTS. 



VOL. 






D. C. 
1912 

Underwood 

v. 

Cox. 

Boyd, C. 



No one can read the plaintiff’s evidence (with the light re- 
flected from this letter) and fail to see that the man knew how 
to touch the sore sport in his sister’s past life. 

No one who reads the defendant’s evidence (with the light 
so reflected) can fail to see the cause of her mental disturbance, 
her distress of mind. She could not collect her senses : she failed 
to recollect, and that at many critical points, when, if she were 
an untruthful witness, it would have been simple and easy for 
her to fabricate favourable responses. 



Consider the parties pitted against each other, in the absence 
of the husband and children and in the seclusion of the farm- 
house : he suing as a book-keeper, but giving evidence as an “ in- 
surance-solicitor, ’ ’ whose business it was to persuade people, and 
who had the adroitness and resourcefulness and assurance pos- 
sessed by a shrewd man in that line of business. 'She, the young- 
est of the family, in frail health (as he admits), nervous, with- 
out knowledge of affairs, and without advice — burdened, more- 
over, with a secret, condoned after thirteen years of married 
life, but now likely to be revealed in all the publicity of an open 
Court. He takes out a copy of the will and reads it to her: he 
says he has authority to come down and break the will, and that 
she had to get on her knees because there was going to be a big 
storm. Confronted with the last statement, all that the plaintiff 
can say is, “To the best of my recollection and knowledge I said 
no such thing.” 

Again he said (with reference to the farm willed to Mary, 
which the testator before his death sold and conveyed to her), 
“The selling of the farm to Mary Ann could break the will.” 
This statement is not contradicted by the plaintiff. 

Again he said, “If the will was broken, I would lose every- 
thing, and my sisters would come in for the money that was 
left to me (i.e. the residue), and my little child would lose hers 
. . . lie said he had stopped the business. ... I did not 

know what a caveat was.” To stay all this turmoil and ex- 
posure, she was to give up the money in the bank (which turned 
out to be about $760) and to pay $700 besides. 

This because, as he said in his letter to Morgan, she and the 
girl get the entire estate. What was the entire estate given by 



XXVI.] 



ONTARIO LAW REPORTS. 



319 



the will ? As valued by the affidavit of the executor Wyper, as 



follows : — 

Household goods and furniture $ 10.00 

Mortgage to child (to be paid by Mrs. Cox) . . 1,000.00 
Cash in bank (reduced by expenses to $750) . 1,000.00 
The small lot to Mrs. Cox, value 400.00 



D. C. 
1912 

Underwood 

v. 

Cox. 
Boyd, C. 



$2,410.00 

The plaintiff makes grave complaint of the “ organ” being 
given to the child : an old organ, bought, as is proved, by his 
mother, and, like the land (as he says), intended for him. The 
mother died in 1885, and the organ of that age was included in 
the valuation at $10. The woman appears, therefore, to have 
been willing to strip herself of all she gets from her father, i.e., 
$700 in bank and $400 in lot, and give $300 more, to save the 
mortgage for her little girl and save both of them from public 
shame. 

It is necessary, perhaps, to say a little more of what took 
place after the 4th May. The plaintiff permitted her to talk it 
over with her husband that night, and he would return in the 
morning. I suppose the wife communicated the proposition and 
her misery in some way to her husband (what passed was not 
and could not be given in evidence) ; but, at all events, the effect 
on the man was simply stupefying. He is, I judge, a slow- 
witted man : if not exactly stupid, certainly not one to be looked 
to in an emergency. The plaintiff agrees that any conference 
between the two would not much help either of them. He is 
asked : “ Of course they did not contribute much to each other ’s 
wisdom ? A. I cannot help that ... I done the best I could. ’ ’ 
That is, I think, true. He did the best he could for him- 
self. Walter Cox, when examined, appeared to be all at sea: 
he says: “My wife got worried over it, and it got me 
rattled . . . my wife was so much worked up about it and 

nervous that it got me rattled, and I would not talk to the plain- 
tiff.” “My mind was in a queer state that day” (5th May). 
“I spoke in the house of getting some advice before she signed 
and before going to Wyper ’s (the executor). . . I did not 

think of advice at Wilson’s (who drew the agreement) ; it was 






320 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
]912 

Underwood 

v. 

Cox. 

Boyd, C. 



too far gone : he had ns heat. I was beat completely. My idea 
was when I spoke abont getting advice, I wanted to come to 
Toronto, but he said he had not time — to-morrow was the last 
day to act. . . . Neither my wife nor I said at our house that 
we would give what the plaintiff asked. ’ 5 They both contradict, 
in this, the statement of the plaintiff as to their having given 
audible assent. “I was not thinking of giving the money in 
Wilson’s office, for I was bothered quite a bit.” He also affirms 
what his wife says, that the plaintiff told them he had authority 
to break the will, and, if it was broken, we would lose the money, 
and the girl would lose the $1,000. 

Walter says when the paper was laid before his wife to sign 
he said, “Hold on, not to sign. I wanted him to leave the paper 
with me and I would mail it to the lawyers ... he would 
not do that: then I said, ‘Well, go ahead and sign.’ ” 

I may note in passing that the plaintiff appears to have had 
complete influence over his sister Mary: she was not privy to 
this arrangement, and in returning from the draftsman’s office 
the instrument was taken to Mary’s house, who was to sign first, 
and the plaintiff said: “I wonder if she will be satisfied with 
the agreement : if not she will have to sign. ’ ’ She did sign, but 
it is said that she has renounced any claim. The other, Cath- 
arine, did not appear, nor was she examined as a witness. Of 
course, whatever claim she may have for nursing will not be 
affected by the dismissal of this action. She may still proceed 
against the estate or the recipients of it. 



Neither husband nor wife knew anything about law: the talk 
of a caveat would only mystify them, and the plaintiff’s pro- 
testations of his authority to break the will, and the effect on 
the will of part of the land having been sold, would only tend 
further to mislead them. It was eminently a case calling for 
competent advice, but any attempt to seek this was checked by 
the peremptory veto of the plaintiff — in effect presenting the 
filing of the caveat and the purpose of the warning given him as 
to entering an appearance, to hurry matters to a close while yet 
the defendant was under the shock of his demand and fear of 
the consequences which would follow its refusal. 

When the plaintiff was asked if he was not an overmatch 



XXVI.] 



ONTARIO LAW REPORTS. 



321 



for husband and wife, he replies with his usual indirectness, D - c - 

1912 

“Not necessarily.” 

I cannot doubt that the woman was overmatched, overborne, P NDE ^ W00D 
and overreached by her shrewd brother. Prom the moment of 'Cox. 
seeing her, he kept her in hand till the paper was signed on the Boyd, c. 
5th May. He knew that the husband ’s advice would rather con- 
fuse than help her, and he resolutely refused any opportunity 
for them to get independent assistance. When they did get such 
assistance, the result was a letter, dated the 14th May, in which 
the instrument sued upon is repudiated, and the reasons given 
for its repudiation. 



There is another aspect of the plaintiff ’s evidence that I may 
briefly advert to. He is asked: “Why do you object to the little 
girl getting the money? A. She had no claim to it, she had no 
right to it, Q. How do you mean no claim to it ? A. No right to 
it: no moral right whatever . . . the little girl had no legal 

right to the money : he left her money that should have been left 
to us: I made her understand that,” We can read into this 
the method by which the brother made her understand that that 
little girl had no legal or moral claim on the testator or to the 
money. It is worth while, also, to give his answers to the appli- 
cation for delay and to get advice: “Q. Why did you not let this 
woman and her husband have three or four days to go and con- 
sult their solicitor? A. I could not. Q. Why? A. They had 
from Wednesday, Wednesday night I went there, and they 
had from ( ?to) Thursday morning. Q. Why did you not let 
them go? A. I was not asked.” The defendant gives the rea- 
son which the plaintiff gave for refusing them time to get advice. 
It was this, “that he had just till to-morrow to act.” And the 
husband says the same thing: “The plaintiff said he had not 
time; to-morrow was his last day to act. I did not know what 
he meant.” 

I have gone over the main turning point and the subsidiary 
ones on which the judgment should turn. Everything else in 
the way of detail is of little moment. There was the going to 
the executor Wyper to see if he would draw the paper. He 
moralised that it was a good thing parties could agree together, 
and passed them on to a lawyer. Mr. Wilson simply put the 



322 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

Underwood 

v. 

Cox. 

Boyd, C. 



thing into legal shape according to what Underwood told him, 
and all this was in the absence of the wife. She had no one but 
her husband, who was baffled in his attempt, and gave it up. 
No doubt, she was able to go about the house and attend to 
domestic routine, getting dinner ready and the like, but that is 
really no more to the point than to suggest that, because the 
brother kissed her as he left on the evening of the 4th May, he 
had the most fraternal regard for her, and that she recipro- 
cated his friendship. 

The plaintiff had no belief in his flimsy claims upon his 
father or upon his estate or in respect to the validity of the 
will: his whole action indicates a scheme to put money in his 
pocket (by hook or by crook) at the expense of his sister. 

The judgment should be vacated and the action dismissed, 
with all costs below and in appeal to be paid by the plaintiffs. 



Latchford, J. : — I agree in the result. 

Middleton, J. : — Upon the facts, there seems to me only one 
conclusion possible. The bargain itself and all the surrounding 
circumstances shew that there must have been fraud or over- 
reaching on the part of the plaintiff. There was mental inequal- 
ity between the contracting parties, and the stronger was pos- 
sessed of a weapon which he did not scruple to use in his 
attack upon the weaker. Therefore, to me at least, it seems plain 
that the transaction cannot stand. 

When it is made to appear that the bargain was not a fair 
compromise of a real dispute, but a complete surrender to a 
groundless attack, suspicion is at once aroused; and when the 
plaintiff is revealed — not only by his letter, but by his evidence — 
as cruel and unscrupulous, and as a man ready to use an inci- 
dent in his sister’s life for his own financial advantage, and 
reckless enough to attempt to cause the sister to abandon her 
defence to this action by the use of the same threat — and cun- 
ning enough, with his superficial smattering of legal knowledge, 
to think that he could conceal this last attempt by the use of 
the words “ without prejudice” — I am compelled to the con- 
clusion arrived at by my Lord the Chancellor, that the contract 
sued upon is in truth a “nefarious transaction.” 



XXVI.] 



ONTARIO LAW REPORTS. 



323 



The true function and office of the words “without pre- 
judice” is well defined in Pirie v. Wyld, 11 O.R. 422, where it is 
said that “all communications expressed to be written without 
prejudice, and fairly made for the purpose of expressing the 
writer’s views on the matter of litigation or dispute, as well as 
overtures for settlement or compromise, and which are not 
made with some other object in view and wrong motives, are not 
admissible in evidence.” 

This rule, founded on public policy, cannot be used as a cloak 
to cover and protect a communication such as the letter in ques- 
tion, which contains no offer of compromise, but a dishonourable 
threat. 

Appeal allowed. 



D. C. 
1912 

Underwood 

v. 

Cox. 

Middleton, J. 



[DIVISIONAL COURT.] 

PUKULSKI V. JARDINE. D. C. 

Perryman v. Jardine. 19 12 

Company — Liability of Directors for Wages of Servants — Action under On- April 25. 
tario Companies Act, sec. 94 — Execution against Company — Return by 
Sheriff — Statutory Requirements — Return Made after Winding-up 
Order — u Proceeding” against Company — Dominion Winding-up Act, 
sec. 22 — Proof of Status of Defendants as Directors — Travelling Ex- 
penses of Servants — Costs of Second Writ of Execution. 

The plaintiffs, who were servants of a mining company, recovered judg- 
ments against the company for wages, and placed writs of execution in 
the hands of the Sheriffs of two counties, that wherein the company’s 
head office was situated, and that wherein the company’s operations were 
carried on. After this, an order was made for the winding-up of the 
company under the Dominion Winding-up Act, R.S.C. 1906, ch. 144, and 
after that order the Sheriffs made returns of the writs nulla bona ; and 
thereupon the plaintiffs brought these actions against the directors of 
the company under sec. 94 of the Ontario Companies Act, 7 Edw. VII. 
ch. 34: — 

Held, that to comply with this section it was sufficient that the execution 
should be placed in the hands of the Sheriff of the county in which the 
head office of the company was situated; and, upon the facts, the return 
to the execution so issued was not a mere- colourable and illusory return, 
but a return after due diligence to realise the amount out of the effects 
of the company. 

Brice v. Munro (1885), 12 A.R. 453, Jenkins v. Wiloock (1862), 11 C.P. 

505, and Moore v. Kirkland (1856), 5 C.P. 452, followed. 

Grills v. Farah (1910), 21 O.L.R. 457, distinguished. 

2. That sec. 22 of the Winding-up Act, RjS.C. 1906, ch. 144, providing 
that, “after the winding-up order is made, no suit, action or other pro- 
ceeding shall be proceeded with or commenced against the company,” did 
not prevent the making of the return after the winding-up order. 

3. That the plaintiffs had given sufficient proof that the defendants were 
directors of the company. 

4. That an allowance for travelling expenses is within the terms of sec. 94. 

5. That the plaintiffs were not entitled to recover against the defendants 
the costs of the second writs of execution. 

Judgment of Denton, Co. C.J., affirmed. 



324 



ONTARIO LAW REPORTS. 



D. C. 
1912 

PUKULSKI 

V. 

Jardine. 



[VOL. 

Appeals by the defendants and cross-appeals by the plain- 
tiffs from judgments of Denton, Jun. Co. C.J., in actions in the 
County Court of the County of York. 

The actions were brought against the defendants, as directors 
of the Boyd-Gordon Mining Company Limited, to recover the 
amounts of unsatisfied judgments obtained by the plaintiffs 
against the company for wages, in enforcement of the right 
given by sec. 94 of the Ontario Companies Act, 1907 (7 Edw. 
VII. ch. 34). 

The judgments appealed from were in favour of the plain- 
tiffs, except as to the costs of a second writ of execution, which 
were disallowed. The cross-appeals were from this disallowance. 



April 2. The appeals and cross-appeals were heard by a 
Divisional Court, composed of Boyd, C., Latchford and Mid- 
dleton, JJ. 



E. B. Ryckman, K.C., for the defendants argued that the 
actions, being brought under the statute, must be confined 
strictly within its limits, and submitted that, as the effect of 
the order, under the Winding-up Act, was to stay all proceedings 
against the company, the plaintiffs must fail, the order having 
been made before the executions against the company were re- 
turned. The return must speak from the date when it was made ; 
and on the 20th October, 1911, when the return was made to the 
Pukulski writ, the goods were in the custody of the law : 
Churchill’s Law of Sheriffs, 2nd ed., p. 347. The return of 
nulla bona to the writ was improper, as there were goods, and 
the return should have stated the circumstances : Wright v. 
Lainson (1837), 2 M. & W. 739; Warmoll v. Young (1826), 5 
B. & C. 660; Grills v. Farah (1910), 21 O.L.R. 457. If it were 
possible to make. a return at all, it should have been a special 
one ; but, after the winding-up order, the Sheriff was not in a 
position to take any step whatever, even to make a return, as that 
would be "proceeding with a proceeding” within the meaning 
of sec. 22 of the Winding-up Act, R.S.C. 1906, eh. 144. The 
directors 'are still officers of the company, and as guarantors in 
respect of wages are only liable after the company has failed to 
pay. Nor has it been proved that the defendants are directors. 



XXVI.] 



ONTARIO LAW REPORTS. 



325 



This is not proved by the Government return of December, 1910 ; D. Ct 

and the minute-book produced is not evidence under sec. 119 of 

the Companies Act. In any case, that part of the claim which is Pukulski 

, c, 

for travelling expenses and board should be disallowed. Jardine. 

J. P. MacGregor, for the plaintiffs, argued that the books 
kept under sec. 113 of the Companies Act were sufficient primd 
facie evidence that the defendants were directors of the com- 
pany, and the onus was on them to shew that they had ceased 
to be so. As to the return by the Sheriff, he referred to Brice v. 

Munro (1885), 12 A.R. 453, per Hagarty, C.J.O., at p. 464. The 
evidence shews that reasonable efforts were made by the Sheriff 
to find assets, and that his return was justified by the facts. 

Grills v. Farah is a quite different case from the present, as the 
action was under different provisions from those here in ques- 
tion. The following cases were also referred to : Gyfford v. 

Woodgate (1809), 11 East 297, cited in Avril v. Mordant (1834), 

3 L.J.N.S. K.B. 148; Goubot v. Be Group (1833), 1 C. & M. 

772. The costs of both executions should have been allowed. 

Ryckman, in reply. 

April 25. Boyd, C. : — The liability of the directors of a com- 
pany to pay one year ’s wages of the labourers and servants there- 
of for services performed while they were directors, requires as a 
preliminary requisite that an execution against the company is to 
be returned unsatisfied in whole or in part. This is the same 
form of words which has frequently been the subject of judicial 
exposition in various company Acts in respect to creditors and 
shareholders, e.g., the Railway Act, CjS.'C. 1859, ch. 66, sec. 80. 

The conclusion not now to be controverted is, that it is 
enough to satisfy the statute if a bond fide attempt has been 
made to collect the amount of the judgment from the company, 
and that a bond fide return has been made that there is nothing 
in the shape of assets of the company to satisfy it: Brice v. 

Munro, 12 A.R. 453, at pp. 464 and 468. 

It is also sufficient if the writ of execution be directed to the 
Sheriff of the county where the venue is laid, or the county 
where the head office of the company is situated, and it be duly 
returned by him that the company has not any goods or chattels 
in his bailiwick: Nixon v. Brownlow (1856), 1 H. & N. 405; 



326 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1912 

PUKULSKI 

V. 

Jardine. 
Boyd, C. 



Jenkins v. Wilcock (1862), 11 C.P. 505. The writ having been 
issued to the Sheriff, he is bound to return it, and it is not shewn 
that the return in this case is untrue. On the contrary, it ap- 
pears that he has done all that the law requires. As expressed 
by Willes, J., in Ilfracombe R.W. Co. v. Devon and Somerset 
R.W. Co. (1866), L.R. 2 C.P. 15, it must be shewn that “ reason- 
able efforts have been made to discover property of the com- 
pany which could be made available to satisfy the judgment,’ * 
and this has been affirmatively established. The proceedings 
(prior to the date when the winding-up of the company began) 
upon the execution were neither formal, illusory, nor fraudu- 
lent, and were taken for the purposes of, if possible, obtaining 
satisfaction of the judgment, and not merely to give colour to the 
statutory action against the directors. The writ was returned 
unsatisfied because no effects could be found available to the 
plaintiffs under it. The tests suggested by Moore v. Kirkland 
(1856), 5 C.P. 452, and Jenkins v. Wilcock , already cited, have 
been complied with, and in this essential point the case is very 
different from Grills v. Farah, 21 O.L.R. 457, where a merely 
formal return of nulla bona was directed and procured by the 
plaintiff himself. 

The winding-up order effectually removes any possible 
assets, whether goods or lands, from the operation of an execu- 
tion, but it does not otherwise interfere with the right of 
the plaintiffs to proceed against the directors for the recovery 
of the claims which could not be levied out of any discoverable 
goods or chattels up to the time of the return. 

The remedy of servants by way of preferential claims under 
the Winding-up Act is limited to three months’ wages (R.S.C. 
1906, ch. 144, sec. 70) ; but they are not obliged to look to or 
wait for some possible relief to this extent under the Dominion 
statute: they may well resort to the more favourable provisions 
of the Ontario enactment: Mackenzie v. Sligo and Shannon R.W. 
Co. (1854), 4 E. & B. 120, and Palmer v. Justice Assurance 
Society (1856), 6 E. & B. 1015. 

It is argued that the prohibitions of the Winding-up Act 
forbid the acts of the Sheriff in making his return of what he 
had previously done, because of the winding-up order of the 



ONTARIO LAW REPORTS. 



327 



XXVI.] 



29th September, 1911 — his return being dated the 19th October, 
1911. The writ issued and was received by the Sheriff on the 
12th September; he could discover nothing to be seized up to 
the 29th September; and this is the information which is com- 
municated by his return. That return is not a proceeding 
against the insolvent company, within the meaning of the Act. 

Sections 22 and 23 are to be read together to ascertain their 
true scope. Section 22 enacts that, “ after the winding-up 
order is made, no suit, action or other proceeding shall be pro- 
ceeded with or commenced against the company, except with 
the leave of the Court and subject to such terms as the Court 
imposes. ’ ’ Section 23 is : “ Every attachment, sequestration, dis- 
tress or execution put in force against the estate or effects of the 
company after the making of the winding-up order shall be 
void.” 

The former section is evidently to apply to proceedings 
prior to and with a view to some judgment, and does not relate 
to “executions,” which are named in the next section: and this 
section relates to things to be enforced against property, such 
as ‘ 1 executions ’ ’ and the like, of a final, and ‘ ‘ distress ’ ’ and the 
like, of a preliminary nature. It relates, however, to these be- 
ing “put in force” against the property of the company. This 
Sheriff’s “return” of the execution is merely an intimation that 
it has not been and cannot be “put in force,” and that it is and 
has proved to be abortive. It is not within the mischief to be 
avoided, and not within the language of the Act. 

Apart from these two main contentions, others were urged 
before us which my brother Middleton has dealt with and dis- 
posed of, and I need not go over the same ground, as I agree 
with his conclusions. 

The judgment is right and should be affirmed, with costs in 
both cases. 

Middleton, J. : — These actions were brought by workmen 
against the defendants as directors of the Boyd-Gordon Min- 
ing Company Limited, under sec. 94 of the Ontario Companies 
Act. This section is as follows : ‘ ‘ The directors of the company 
shall be jointly and severally liable to the labourers, servants, 



D. C. 
1912 

PUKULSKI 

V. 

Jardine. 
Boyd, C. 



328 



ONTARIO LAW REPORTS. 



D. C. 
1912 

PUKULSKI 

V. 

Jardine. 

Middleton, J. 



[VOL. 



and apprentices thereof for all debts not exceeding one year’s 
wages due for services performed for the company while they 
are such directors respectively; but no director shall be liable 
to an action therefor, unless the company has been sued therefor 
within one year after the debt became due, nor unless such 
director is sued therefor within one year from the time when he 
ceased to be such director, nor before an execution against the 
company has been returned unsatisfied in whole or in part; and 
the amount due on such execution shall be the amount recover- 
able with costs against the directors.” 

Apart from some minor matters, the main contention of the 
defendants is based upon the fact that, before the executions 
against the company were returned, a winding-up order under 
the Dominion Act had been pronounced. It is said that the 
effect of this order was to stay all proceedings against the com- 
pany, and that, therefore, the returns to the executions made 
after the winding-up are null and void. 

The question so raised is of importance, as, if the defendants’ 
argument is well founded, the effect of the winding-up order 
is materially to diminish the right of wage-earners and the 
liability of directors; because, under the Ontario statute, the 
directors are liable to the extent of one year’s wages, while, 
under the Dominion Winding-up Act, the wage-earner is en- 
titled only to a preference for his unpaid wages not exceeding 
the arrears which have accrued during the three months next 
previous to the date of the winding-up order: R.S.C. 1906, ch. 
144, sec. 70. The question is also of importance because, in 
many cases, the entire assets of the company in liquidation are 
taken by debenture-holders ; and, if the contention is well 
founded, the directors, by reason of the winding-up order, may 
altogether escape this statutory liability. 

Before considering the validity of this argument and the 
other questions raised, it is desirable to set out the facts proved 
at the trial, at length. 

The Boyd^G-ordon Mining Company has its head office at 
Toronto. It conducted mining operations in the district of 
Nipissing. On the 11th September, 1911, Pukulski recovered 
judgment against the company for $157.06, wages earned during 



XXVI.] 



ONTARIO LAW REPORTS. 



329 



the months of June, July, and August, 1911, and $22.04 taxed 
costs, in addition to the costs of execution. Upon the same day 
writs of execution against goods and lands were issued to the 
Sheriff of Toronto, and on the following day these were placed 
in the hands of the Sheriff for execution. Contemporaneously, 
an execution was issued directed to the Sheriff of Nipissing. 
This was placed in the hands of that Sheriff on the 15th Sep- 
tember. 

On the 16th September, the company made an assignment 
for the benefit of its creditors; and on the 29th September an 
order was made for the winding-up of the company under the 
Dominion Act. 

In order that the conditions precedent prescribed by the 
statute might be complied with, the plaintiffs ’ solicitor requested 
the Sheriffs to return these writs of execution, and they were 
respectively returned unsatisfied. The endorsement upon the 
writ to the 'Sheriff of Toronto was: “Nulla bona. The answer 
of Fred. Mowat, Sheriff.” The return upon the Nipissing writ 
was: “ Returned unsatisfied. H. Varin, Sheriff.” Thereupon 
this action was brought. 

The contention of the defendants is, that the returns made 
to the writs are void, because, by sec. 22 of the Winding-up Act, 
it is provided that, “ after the winding-up order is made, no 
suit, action or other proceeding shall be proceeded with or com- 
menced against the company, except with the leave of the Court 
and subject to such terms as the Court imposes;” and by sec. 
23 it is provided that “every attachment, sequestration, distress 
or execution put in force against the estate or effects of the com- 
pany after the making of the winding-up order shall be void.” 

The cases collected by Mr. Justice Riddell in Grills v. Fardk, 
21 O.L.R. 457, are relied upon as shewing that it is open to the 
defendants to attack the return in a proceeding such as this. 
That action, and the cases there cited, were not proceedings 
under the same provision of the Ontario Companies Act, but 
were under the provision which enables a creditor of the com- 
pany to reach the unpaid capital by proceeding against the indi- 
vidual shareholders — analogous to sci. fa. Before these proceed- 
ings can be taken, it must be shewn that an execution against 



D. C. 
1912 

PUKULSKI 

V. 

Jardine. 

Middleton, J. 



330 



ONTARIO LAW REPORTS. 



D. C. 
1912 

PUKULSKI 

V. 

Jardine. 

Middleton, J. 



[VOL. 



the company has been returned unsatisfied. Moore v. Kirkland, 
5 C.P. 452, and Jenkins v. Wilcock, 11 C.P. 505, both determine 
that what the statute requires is not a return pro forma, but a 
return after due diligence to realise the amount out of the effects 
of the company. As it is put by Draper, <C. J., in the latter case : 
“It is not, to be sure, a mere illusory formal proceeding, to give 
colour to proceedings against a shareholder.” 

Brice v. Munro, 12 A.R. 453, establishes that all that is 
required is, that the execution should be issued to the Sheriff 
of the county in which the head office of the company is. 

Upon the facts in this case, it is quite clear that the return 
to the execution was not a mere colourable and illusory return, 
and that the Sheriff had exercised due diligence to find assets 
within his shrievalty. Upon the hearing it was not shewn that 
there were any assets which could have been taken under execu- 
tion. At present it seems to me that the onus Was upon the 
defendants, but the plaintiffs have assumed that it was for them 
to do more than put in the return ; and, if they rightly assumed 
the onus, they have abundantly discharged it. 

Then, does the Dominion Act quoted prevent the making of 
the return after the winding-up? I think clearly not. That 
statute aims at the ratable distribution of the assets of the com- 
pany among its creditors; and so the winding-up supersedes the 
executions and prevents the creditor from further prosecuting 
his execution against the assets of the company. The Sheriff 
would then be justified in returning the execution unsatisfied. 
He is not by the Ontario Act required to make a return nulla 
bona; and I think it would be sufficient if he made a special 
return, stating: “I return the writ unsatisfied, because I am 
unable to take the assets of the company within my bailiwick in 
execution, by reason of the making of an order under the 
Dominion Winding-up Act for the winding-up of the company.” 
This cannot be regarded as a “proceeding with the writ against 
the company,” which is the thing prohibited by the statute. 
The Ontario statute, which imposes this liability upon the direc- 
tors of the company, seeks to protect them from vexatious pro- 
ceedings while the company has assets to which the creditor may 
resort. As soon as these assets are withdrawn from and ren- 



XXVI.] 



ONTARIO LAW REPORTS. 



331 



dered unavailable to the process of the wage-earner, and the 
Sheriff certifies that there are no assets which he can take, the 
obstacle is removed and the wage-earner is free to enforce his 
remedy. 

It is argued that the plaintiff has not proved that the defen- 
dants are directors of the company. He has put in a certified 
copy of the last Government return, which shews that the de- 
fendants were then directors; and he has produced the minute- 
book of the company from the custody of the liquidator, these 
minutes shewing that the directorate has not since been changed. 
This appears to be sufficient. 

Two minor questions were argued before us. It was said 
that an allowance for travelling expenses did not come within 
the statute. We thought it did. 

Then the plaintiff complained that he had not been allowed 
the costs of the second writ of execution, and cross-appealed 
with reference to it. We think the Judge was right in disallow- 
ing these. See Marquis of Salisbury v. Ray (1860), 8 C.B. N.S. 
193; and In re Long, Ex p. Cuddeford (1888), 20 Q.B.D. 316. 

Both appeals should be dismissed. The defendants should 
pay the costs, less $5 allowed in respect of the cross-appeal. 

The facts in the Perryman case are substantially similar, 
and the same order will be made in it. 

Latchford, J. : — I agree. 

Appeals dismissed. 



D. C. 
1912 

PUKULSKI 

V. 

Jardine. 

Middleton, J. 



I 



332 



ONTARIO LAW REPORTS. 



[VOL. 



[IN CHAMBERS.] 



1912 



Kuula v. Moose Mountain Limited. 



April 17 
May 3 



Practice — Consolidation and Stay of Actions — Common Defendant — Distinct 
Claims of Different Plaintiffs — Damages — Directions as to Trial. 



Four different plaintiff's brought separate actions against the same defend- 
ants; the cause of action in each case was injury to the premises of the 
plaintiff by the spread of fire negligently set out by the defendants upon 
their land and negligently permitted to spread to the plaintiff’s land: — 

Held, affirming the order of the Master in Chambers, that there could not 
be consolidation of the actions, upon the application of the defendants, 
either in the strict sense of the word “consolidation,” as used in Con. 
Rule 435, or in the looser sense, as where one of the actions is selected 
as a test action, and the trial of the others stayed until it has been 
finally determined. The issues in the four cases, though similar, were 
quite distinct. And a plaintiff cannot be compelled to tie up his case 
with those of the other plaintiffs, without his- consent. 

Lee v. Arthur (1908), 100 L.T.R. 61, Westbrook v. Australian Royal Mail 
Steam Navigation Co. (1853), 23 L.J.N.S. C.P. 42, and Williams v. Town- 
ship of Raleigh (1890), 14 P.R. 50, applied and followed. 

Although a consolidating order was refused, a direction was given that the 
four actions should be entered for trial at the same sittings, in order 
that the trial Judge might make such arrangements as would prevent 
unnecessary repetition of evidence. 

Consideration of the practice in regard to the consolidation and stay of 
actions. 



Motion by the common defendants in the above action and 
three others, each brought by a different plaintiff, for an order 
consolidating the four actions or staying three of them until 
after the trial and final disposition of one, the defendants un- 
dertaking to be bound by the result in that one. 

April 16. The motion was heard by Mr. James S. Cart- 
wright, K.C., Master in Chambers. 

R. C. H. Cassels, for the defendants. 

H. E. Rose, K.C., for the several plaintiffs. 

« 

April 17. The Master : — These four actions are brought to 
recover damages alleged to have been suffered by the respective 
plaintiffs through a fire set out by the defendants on their own 
lands in the township of Hutton, on the 10th July, 1911. 

The first plaintiff claims $2,809.02 ; the second, $95,000 ; the 
third, $32,500 ; and the fourth, $31,207.58. No details are given 
of these sums. In each case the statement of claim alleges negli- 
gence on the part of the defendants. The plaintiffs are all 



XXVI.] 



ONTARIO LAW REPORTS. 



333 



represented by the^same solicitors. The statement of defence in 
each case is a simple denial of the allegations of the statement 
of claim. 

The defendants now move to have these actions consolidated, 
or to stay three of them until the first action has been tried, 
the defendants undertaking to be bound by the result in that 



Master in 
Chambers. 

1912 

Kuula 

V. 

Moose 

Mountain 

Limited. 



case. 



The defendants also ask that only one of four examinations 
of their officers for discovery be allowed to proceed. In each 
case, an appointment has been taken out for this purpose, and in 
each case for the examination of a different officer. 



Unless the decision in one of a number of actions, such as 
those in question, would necessarily dispose of the essential 
cause of action in the others, no order could be usefully made 
to stay the rest. And unless this could be done, the actions 
could evidently not be consolidated. 

The present cases seem to be analogous to that of Williams 
v. Township of Raleigh (1890), 14 P.R. 50. There, at p. 53, 
it was said: “ Proof that there was the resulting injury to the 
lands of one plaintiff would not be proof of any evidence at 
all that there was the like” (or any other) “injury to the 
lands of any other plaintiff.” These words are applicable to 
the present motion; and, though the decision was given before 
Con. Rule 185 was amended to read as it now stands, yet it is 
not less an authority. 

It is at least doubtful if these four plaintiffs could have 
united in one action. The only thing alleged in common is the 
fact that a fire or fires were negligently set out by the defend- 
ants. This, though technically in issue, is probably not denied, 
so far as the fact of fire being set out is concerned. But what 
would be sufficient proof of negligence by one plaintiff might 
not be so in the case of the others — much would depend upon 
location, direction of wind, condition of the plaintiff’s own 
property, and other circumstances peculiar to each case. 

The only direction that can usefully be given now is, that 
the actions be all set down together so that any evidence com- 
mon to all (if such there be) may not be repeated, as the trial 

23 — XXVI. O.L.R. 



334 

Master in 
Chambers. 

1912 

Kutjla 

Q. 

Moose 

Mountain 

Limited. 



ONTARIO LAW REPORTS. [vol. 

Judge would, no doubt, direct. See Carter v. Foley -0 ’Brien Co. 
(1912), 3 O.W.N. 888, citing the Raleigh case. 

As to the examinations for discovery, that point too was dealt 
with in Carter v. Foley-0 ’Brien Co., though there it was the con- 
verse case of a plaintiff wishing to have only one examination for 
discovery, to be applicable to all the three actions. There it was 
said by Middleton, J. : “Even if convenience indicated the 
propriety of the order sought, I am clear that there is no power 
to make it.” 

Neither of the reliefs asked for here could possibly have 
been granted if the plaintiffs had not all been represented by 
the same solicitors. See as to this, Conway v. Guelph and Goderich 
R.W. Co. (1907), 9 O.W.R. 369, affirmed on appeal, ib. 420 — 
where the matter is considered generally, and the difficulties 
that might arise if consolidation was ordered, are pointed out. 

For the same reasons, it does not seem possible to interfere 
with the examinations for discovery. As the plaintiffs’ solici- 
tors are the same, it is not to be presumed that, if one examina- 
tion gives the necessary information, they will proceed with 
the others — especially as these depositions cannot be used at the 
trial. But, even if they do, that must be left to the trial 
Judge or the Taxing Officer to deal with, when the question of 
the costs is raised before them or either of them. The only way 
that occurs to me of avoiding more than one examination is for 
the defendants to make admission of such fact or facts as are 
common to all the cases. 

In this way possibly the length of more than one examina- 
tion might be considerably reduced, even if proceeded with. 
But, apart from their own consent, there is no power to control 
or limit the plaintiffs’ proceedings so long as they are regular. 

The motion will be dismissed — costs in the cause to the plain- 
tiffs. 

% 

The defendants appealed from the order of the Master. 

April 30. The appeal was heard by Middleton, J., in 
Chambers. 

R. C. H. Cassels, for the defendants. 

H. E. Rose, K.C., for the plaintiffs. 



XXVI.] 



ONTARIO LAW REPORTS. 



335 



May 3. Middleton, J. : — It is said that on or about the 
10th July, 1911, the defendants set out a fire upon their lands, 
which fire spread, and destroyed the premises of the several 
plaintiffs in these four actions. In each action the plaintiff 
presents his case in alternative ways. First, he charges that 
the fire set out on the defendants’ premises spread to his; 
next, he charges that the fire was set out negligently; and, in 
the third place, that by reason of the negligence the fire was 
permitted to spread on the defendants’ premises to the plain- 
tiff’s premises. 

The Master, while refusing consolidation of the actions, 
has directed that they shall all be entered for trial at the same 
sittings of the Court, and at the trial the presiding Judge will, 
no doubt, make such arrangements as will prevent unnecessary 
repetition of evidence, in all the cases. But it is manifest that, 
if each plaintiff has to establish that the fire escaped from the 
defendants’ premises to his premises by reason of the negligence 
of the defendants, the issue in each case, although similar, is 
quite distinct. 

There is much confusion upon the subject of consolidation of 
actions, arising mainly from a loose and inaccurate use of the 
word “consolidation.” As said by Moulton, L.J., in Lee v. 
Arthur (1908), 100 L.T.R. 61, 62: “Consolidation is much more 
rarely applicable than is generally supposed, because the ex- 
pression is used in cases where the word is really not appro- 
priate at all, as in cases where the trial of one action is stayed 
pending the hearing of another action. In a case like that the 
Court will not allow its process to be abused. That is often 
called 'consolidation,’ but it is not really consolidation.” 

It is important, in the first place, to observe that Con. Rule 
435 is intended to deal with the consolidation of actions, in the 
strict sense of that term. The jurisdiction to stay actions prob- 
ably exists quite apart from any statutory provision^ as part of 
the inherent power of the Court over its own process; but this 
power is recognised and confirmed by sec. 57, sub-sec. 9, of 
the Judicature Act. 

Con. Rule 435 provides that ‘ ‘ actions may be consolidated by 
order of the Court or a Judge in the manner in use in the 



Middleton, J. 

1912 

Kuula 

v. 

Moose 

Mountain 

Limited. 



336 

Middleton, J. 

1912 

Kuula 

v. 

Moose 

Mountain 

Limited. 



ONTARIO LAW REPORTS. [vol. 

Superior Courts of Common Law, prior to the Ontario Judi- 
cature Act, 1881.” The terms of this Rule have given rise to 
some difference of opinion. It. was at one time supposed that 
it permitted consolidation only in the cases in which at com- 
mon law consolidation would have been ordered prior to the 
Judicature Act. But this has been set at rest by the decision 
in the Court of Appeal in Martin v. Martin & Co., [1897] 1 Q.B. 
429, where this construction of the Rule was rejected, and it is 
said that the true meaning of the expression “in the manner in 
use,” etc., is not to continue the practice in force before the 
Act, hut “that if an order is made it should he treated in the 
same manner as before.” 

At common law, consolidation originally applied to the case 
where there were two actions between the same parties. There 
the actions were “consolidated,” in the strict sense of the term; 
the issues raised in the two actions were directed to be set up 
in one action. If the plaintiff unnecessarily instituted two or 
more actions, based upon separate claims, which could conveni- 
ently be tried together, his conduct was regarded as vexatious. 
If good reason existed for the separate actions — e.g., if one claim 
was not due when the other action was brought — the Court, in 
the control of its own process, consolidated so as to avoid un- 
necessary litigation. 

By statute 19 Viet. ch. 43, sec. 76 — afterwards sec. 75 of 
the Common Law Procedure Act, CjS.U.C. 1859, ch. 22 — a hus- 
band and wife, suing in respect of an injury to the wife, might 
join in the same suit a claim by the husband in his own right; 
and, if separate actions were brought, these might he consoli- 
dated. This is also true consolidation. 

At common law also, a practice had grown up, not upon any 
statutory power, but entirely upon the inherent jurisdiction of 
the Court, of staying the trial of actions pending the determin- 
ation of a test action. This frequently is somewhat loosely 
described as “consolidation.” The practice was introduced by 
Chief Justice Mansfield in actions brought against underwriters 
in insurance cases. The promises of the underwriters being 
separate, separate actious had to be brought, in respect of any 
loss, against each of the underwriters. Frequently there was 



XXVI.] 



ONTARIO LAW REPORTS. 



337 



■ 



only one question really to be tried, sneli as the fact of loss. 
Upon the application of the defendants in such a. case, the 
actions would be stayed, if the defendants undertook to consent 
to judgment in the event of the plaintiff succeeding in the test 
action. In the event of the plaintiff’s failure, he would then 
either abandon the other actions or proceed with them, as he saw 
fit. As this relief was an indulgence to the defendants, they 
were compelled to consent to this somewhat one-sided bargain. 
See, for example, Colledge v. Pike (1886), 56 L.T.R. 124. 

Conversely, where a plaintiff, having brought several actions 
for similar causes of action, applied for a stay of proceedings to 
relieve him from the onus of prosecuting a number of actions in 
which he might be unsuccessful, a stay was ordered, upon the 
terms that, if he failed in the action which he chose as a test 
action, he should consent to a judgment against him in all the 
others. 

In the Courts of equity, consolidation, in either the strict 
sense or the modified sense, seems to have been unknown. The 
Court undoubtedly exercised its power to restrain abuse of its 
process, and it would not permit the prosecution of two suits 
for the same cause of action; but the reported instances differ 
widely from the cases at common law. If two actions were 
brought on behalf of an infant by different next friends, the 
Court stayed the proceedings in one. If two suits were brought 
for administration, as soon as judgment was pronounced in 
one, the proceedings in the other were stayed; because the ad- 
ministration judgment was a judgment in favour of all. Where 
several suits were brought by different debenture-holders, for 
the purpose of realising their securities, one action alone was 
allowed to proceed. The principle in all these cases was, that 
two suits for the same relief ought not to be allowed to proceed 
in the same Court concurrently. See cases collected in Daniell’s 
Chancery Practice, 5th ed., p. 698. 

After the Judicature Act, in Amos v. Chadwick (1877), 4 
Ch.D. 869, Malins, V.-C., construed the Consolidated Rule in the 
manner now rejected by the Court of Appeal ; but, by virtue of 
the inherent power to prevent abuse of the process of the Court, 
lie stayed until after the trial of the test action seventy-eight 



Middleton, J. 

1912 



Kuula 

V. 

Moose 

Mountain 

Limited. 



338 



ONTARIO LAW REPORTS. 



Middleton, J. 

1912 

Kuula 

V. 

Moose 

Mountain 

Limited. 



[VOL. 



actions brought by different shareholders against the directors 
of a company for misrepresentation in the prospectus. The 
plaintiff selected failed to prosecute his action, and, as he did 
not appear at the trial, the action was dismissed. The terms 
of the order for consolidation appear from the report of the 
case in (1878), 9 Ch.D. 459. It provided that the plaintiffs, 
who had applied for consolidation, should be bound by the test 
action; but the defendants were to be at liberty to require a 
separate trial. After this abortive proceeding, a motion was 
made for relief and for the trial of another action as a test 
action. Malins, V.-C., then made an order substituting another 
action as a test action. The defendants appealed; and the sole 
question upon the appeal was, whether the test action had been 
“ tried/ ’ within the meaning of the terms of the order. The 
Court upheld the defendants’ contention. But it is manifest 
that some, at any rate, of the Judges doubted whether the 
original order had been properly made; Brett, L.J., saying (9 
Ch.D. at p. 464) : ‘‘It seems to me that no such order as this 
ought to be made unless the questions in the actions are sub- 
stantially the same, and the evidence would be substantially the 
same if they were all tried.” 

This view is that now adopted in the case already cited, 
Lee v. Arthur, where the Master of the Rolls quotes the judg- 
ment in the case of Corporation of Salt ash v. Jackman (1844), 
1 D. & L. 851, and states that the Court “cannot compel one 
defendant against his wish to have his case tied up with those of 
defendants in other actions.” 



The same reasoning shews the impossibility of compelling a 
plaintiff to tie up his case with those of other plaintiffs, without 
his consent. Westbrook v. Australian Royal Mail Steam Navi- 
gation Co. (1853), 23 L.J.N.S. C.P. 42, is an illustration of this. 
Eight separate passengers, by the same attorney, brought separ- 
ate actions for damages arising out of a breach of contract for 
passage, whereby the plaintiffs suffered in their health. Maule, 
J., said: “They have different grievances. Mr. Smith could not 
be said to have suffered in Mr. Brown’s health.” 

Williams v. Township of Raleigh, 14 P.R. 50, affords another 
illustration. Several plaintiffs brought separate actions for 



XXVI.] ONTARIO LAW REPORTS. 

injury to their several farms by certain drainage works ; and it 
was held by Ferguson, J. — a Judge most familiar with the com- 
mon law practice — that there could not be consolidation, in 
either the true or the modified sense of that expression. 

The direction which has been given by the learned Master in 
Chambers, I think, satisfactorily meets the case. Manifestly, 
damages will have to be assessed in the different cases; and it 
would be most unfair to direct the trial of the individual claims 
to be delayed, when this would delay the recovery of final judg- 
ment. The circumstances prevent the imposition of the term 
invariably required: a stay will only be granted when the de- 
fendants consent to judgment — that is, a final judgment — in 
the event of their failing in the test action. 

The appeal will be dismissed. Costs to the plaintiffs in any 
event. 



[IN THE COURT OF APPEAL.] 

Re West Lorne Scrutiny. 

Municipal Corporations — Local Option By-law — Voting on — Scrutiny — Scope 
of — Municipal Act, 1903, secs. 369-372 — Votes of Tenants — Residence — 
Finality of Voters’ Lists — Voters’ Lists Act, 7 Edw. VII. ch. 4, sec. 24(2) 
— Vote of Person Disentitled ~by Eon-residence — Inquiry as to how Bal- 
lot Marked — Municipal Act, 1903, sec. 200 — Deduction of Disallowed 
Votes from Majority in Favour of By-law. 

A scrutiny under sees. 369-372 of the Consolidated Municipal Act, 1903, 
in regard to the voting upon a local option by-law, is something more 
comprehensive than a simple recount; and, when proceeding with a 
scrutiny under that section, a County Court Judge has authority to 
inquire whether any persons who have cast their ballots come within 
the excepted class mentioned in sub-sec. 2 of sec. 24 of the Ontario Voters’ 
Lists Act; Maclaren and Meredith, JJ.A., dissenting. 

Upon such a scrutiny, it is competent for the County Court Judge to de- 
clare void the vote of a person voting as a tenant who has cast a ballot, 
when it appears that, although his name was on the certified list, he was 
not, when it was placed thereon, resident and has not since become resi- 
dent within the municipality to which the list relates — within the very 
terms of sub-sec. 2, above referred to, he is not and has not been resident 
within the municipality to which the list relates; Maclaren and 
Meredith, JJ.A., dissenting. 

Upon such a scrutiny, the County Court Judge has no power to inquire 
how any person who was not entitled to vote, marked his ballot: Muni- 
cipal Act, 1903, sec. 200. 

And the County Court Judge should deduct the disallowed votes from the 
affirmative votes. 

Review of the previous decisions upon these questions. 

In re Local Option By-law of the Township of Saltfleet (1908), 16 O.L.R. 
293, and Re Orangeville Local Option By-law (1910), 20 O.L.R. 476, 
specially considered. 

Judgment of a Divisional Court, 25 O.L.R. 267, reversed. 



339 

Middleton, J, 

1912 

Kuula 

v. 

Moose 

Mountain 

Limited. 



C. A. 
1912 

April 29 



340 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 



[vol. 



Appeal by D. H. Mehring, the applicant for a scrutiny, from 
the order of a Divisional Court, 25 O.L.R. 267, 277, varying the 
order of Middleton, J., 23 O.L.R. 598. 



January 24. The appeal was heard by Moss, C.J.O., Gar- 
row, Maclaren, Meredith, and Magee, JJ.A. 

C. St. Clair Leitch and J. M. Ferguson, for the appellant, 
argued that the case turned on the interpretation of sec. 24 (2) 
of the Voters’ Lists Act, and on the decision in In re Local 
Option By-law of the Township of Saltfleet (1908), 16 O.L.R. 
293, and that, on the evidence material and the law applicable 
to the case, an order should not be made prohibiting the County 
Court Judge from certifying that the by-law in question had not 
been approved by the requisite three-fifths majority. 

W. E. Raney, K.C., and J. Hales, for Dugald McPherson, 
respondent, argued that the decision of the Divisional Court on 
the first branch of the case, the question as to the jurisdiction of 
the County Court Judge to go behind the voters’ list, was right 
and should be affirmed. The following cases were referred to: 
Re Weston Local Option By-law (1907), 9 O.W.R. 250; the Salt- 
fleet case, supra ; Re Orangeville Local Option By-law (1910), 
20 O.L.R. 476; Re Ellis and Town of Renfrew (1911), 23 O.L.R. 
427; In re McGrath and Town of Durham (1908), 17 O.L.R. 
514. As to the second branch of the case, the right of the 
County Court Judge to inquire how the persons whose votes 
were disallowed, did vote, it was submitted that the judgment 
of Middleton, J., was right, and that the Courts had gone too 
far in their requirements as to absolute secrecy. 

Leitch, in reply, referred to Re Sinclair and Town of Owen 
Sound (1906), 13 O.L.R. 447; Haldimand Dominion Election 
Case (1888), 1 Ont. Elec. Cas. 529; Re Lincoln Election Petition 
(1878), 4 A.R. 206; Rex ex rel. Ivison v. Irwin (1902), 4 O.L.R. 
192. 



April 29. Moss, C.J.O. : — Appeal from a judgment of a 
Divisional Court, reported 25 O.L.R. 267, allowing an appeal 
from a judgment of Middleton, J., reported 23 O.L.R. 598. The 
facts are fully stated in the report. 



XXVI.] 



ONTARIO LAW REPORTS. 



341 



This case furnishes another example of the difficulty and 
confusion which so often arise from the adoption by the Legis- 
lature of the device of incorporating by reference some of the 
provisions of one statute into the body of another statute which 
is being enacted. The disadvantages of this mode of legislation 
have been remarked upon in England and this country, and it 
has been truly said that this procedure makes the interpretation 
of modern Acts of Parliament a very difficult and sometimes 
doubtful matter. See Knill v. Towse (1889), 24 Q.B.D. 186, 
196, where the question was not unlike in some respects the 
question involved in this case. And a legislative committee in 
England is reported to have described legislation by reference 
as making an Act so ambiguous, so obscure, and so difficult that 
the Judges themselves can hardly assign a meaning to it, and 
the ordinary citizen cannot understand it without legal advice : 
Craies’ edition of Hardcastle on Statutory Law (1907), p. 26. 

It is scarcely to be wondered at, therefore, that unanimity 
of opinion is not to be found expressed in many of the decisions 
in which the questions arising on this appeal or some of them 
have been discussed. 

The first question raised in the appeal has been much debated 
and has given rise to much divergence of opinion among the 
Judges who have had it under consideration in other cases. As 
stated by Teetzel, J., in his opinion delivered while sitting as a 
member of the Divisional Court whose judgment is now in 
appeal, the question is : whether, upon a scrutiny under the 
Municipal Act, the County Court Judge may declare void and 
deduct from the result the vote of a tenant whose name was 
upon the certified voters’ list, but who was not in fact a resident 
of the municipality when the list was certified, and who never 
afterwards became a resident therein. 

This question affects 4 votes polled ; and, if answered in the 
negative, as it was by the Divisional Court, practically ends 
any necessity for discussion as to the fate of the one other vote 
polled, which is in question here. 

In holding that the 4 votes in question were not open to 
attack upon the scrutiny, the Divisional Court considered itself 
bound so to hold by the decision of another Divisional Court in 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Moss, C.J.Q. 



342 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Moss, C.J.O. 



[VOL. 

In re Local Option By-law of the Township of Salt fleet, 16 
O.L.R. 293, though it had been subjected to adverse comment in 
some other cases. 

In Re Orangeville Local Option By-law , 20 O.L.R. 476, 
Meredith, C. J., considered the question of the jurisdiction of the 
Judge to enter upon an inquiry as to the right to vote of any 
one who has deposited his ballot paper, and declared his own 
opinion to he against the exercise of such jurisdiction. He ex- 
pressed the opinion that the inquiry is limited to a scrutiny of 
the ballot papers, and differs only from a recount in that the 
Judge is not limited to dealing with the ballot papers ex facie, 
but may take evidence in the same way as may be done upon a 
trial of the validity of an election of a member of a municipal 
council for the purpose of determining whether any ballot paper 
ought or ought not to be counted. 

* ... I 

With deference, I am unable to follow the distinction drawn 
between a scrutiny of ballot papers and a scrutiny of votes, 
bearing in mind the object with which the scrutiny is entered 
upon. The Judge is to determine and certify whether the 
majority of votes given is for or against the by-law. He is not 
merely, as in the case of a recount under sec. 189 of the Con- 
solidated Municipal Act, 1903, to count up the votes given upon 
the ballot papers not rejected, and make up a written statement 
of the number of votes given for each candidate and of the 
number of ballot papers rejected and not counted by him, and 
certify the result to the returning officer. In all this he is acting 
in a ministerial capacity. In a scrutiny he is acting in a judicial 
inquiry, with the purpose of ascertaining which way, in truth 
and in fact, the majority of the votes is given. Light is thrown 
upon this view by the language of sec. 24 of the Ontario Voters’ 
Lists Act, 7 Edw. VII. ch. 4, which expressly refers to a scrutiny 
under the Municipal Act, as well as to one under the Ontario 
Election Act. That section declares that “the certified list 
shall, upon a scrutiny, under” either of these Acts, “be final 
and conclusive . . . except.” The exception applies to one 

scrutiny as much as the other. Then what is the extent of the 
exception under sub-sec. 2, which is the one with which we are 
immediately concerned? It applies to persons who, subse- 



XXVI.] 



ONTARIO LAW REPORTS. 



343 



quently to the list being certified, are not or have not been resi- 
dent either within the municipality to which the list relates, or 
within the electoral district for which the election is held, and 
who by reason thereof are, under the provisions of the Ontario 
Election Act, disentitled to vote. 

If this sub-section applies to municipal elections, it also 
applies to voting on by-laws, by the express terms of the pre- 
ceding part, which speaks of a scrutiny under the Municipal 
Act. 

So that, when conducting a scrutiny under the Municipal 
Act, reference must be made to the provisions of sec. 24 of the 
Ontario Voters’ Lists Act in order to ascertain the extent to 
which the inquiry can proceed. I agree with those who think 
that a scrutiny under sec. 371 of the Consolidated Municipal 
Act, 1903, is something more comprehensive than a simple re- 
count; and that, when proceeding with a scrutiny under that 
section, the County Court Judge has authority to inquire into 
the question whether any persons who have cast their ballots 
come within the excepted class mentioned in sub-sec. 2 of sec. 
24 of the Ontario Voters’ Lists Act. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Moss, C.J.O. 



I am also of opinion that it is competent for the County 
Court Judge to declare void the vote of a person who has cast 
a ballot, when it appears that, although his name was on the 
certified list, he was not, when it was placed thereon, resident 
and has not since become resident within the municipality to 
which the list relates. Within the very terms of the sub-section, 
as it appears to me, he is not and has not been resident within 
the municipality subsequently to the list being certified. I am 
unable to see why any distinction should be drawn between his 
ease and that of a person who was resident within the munici- 
pality when the list was certified, but ceased to be resident sub- 
sequently to the list being certified. 

The one remaining vote held void by the County Court Judge 
was admittedly within the exception of sub-sec. 2. The result 
should, in my opinion, be that the County Court Judge’s ruling 
was correct, and that his certificate should stand. 

The remaining question dealt with by the Divisional Court 
is, whether, if the County Court Judge, upon a scrutiny con- 



344 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Moss, C.J.O. 



[VOL. 

ducted by him, finds that a person whose name was upon the 
list, hut who had no right to vote, did vote, such person may be 
compelled to disclose before the County Court Judge how he 
did vote. While the decision of the Divisional Court on the 
other branches of the case rendered it unnecessary to consider 
this question so far as the result was concerned, it deemed it of 
sufficient importance to justify a determination upon it. 

Without entering upon any extended discussion, I think it 
quite sufficient for me to say that I entirely agree with the con- 
clusion of the Divisional Court upon the question, as expressed 
in the opinion of Teetzel, J. 

The result upon the whole is, that the order of the Divisional 
Court should be set aside, and that the County Court Judge 
should be left at liberty to certify the result of the scrutiny to 
the council. 

But, in view of the varying and conflicting opinions and 
the apparent difficulty in solving the questions at issue, there 
should be no costs of any of the proceedings. 

Garrow, J.A. This is an appeal from the judgment of a 
Divisional Court reversing an order of Middleton, J., made in 
the matter of a vote taken in the village of West Lorne upon a 
local option by-law. 

After the vote had been taken, one Dameon H. Mehring 
applied to the Judge of the County Court of the County of 
Elgin for a scrutiny of the ballot papers. The scrutiny was 
granted, and was proceeding when one Dugald McPherson ap- 
plied to Middleton, J., for an order prohibiting the County 
Court Judge from entering upon an inquiry as to the right to 
vote of 5 persons whose names appeared upon the voters’ list 
and who had voted, but who, it was alleged, were disqualified, 
or, in the alternative, for a mandatory direction to the County 
Court Judge to ascertain how these persons had voted. 

Middleton, J., agreeing with the County Court Judge, held 
that these persons were not entitled to vote, and directed him 
to inquire and ascertain how they had voted in order to deter- 
mine whether the majority of the lawful votes given was for or 
against the by-law. 



XXVI.] 



ONTARIO LAW REPORTS. 



345 



An appeal from this order was taken and was heard first 
before the King’s Bench Division (see 25 O.L.R. 267) ; and, in 
consequence of the difference of opinion there expressed, re- 
argued before the Exchequer Division (see 25 O.L.R. 277), when 
the appeal was allowed. 

The judgment of Middleton, J., is reported in 23 O.L.R. 
598. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Garrow, J.A. 



The polling took place on the 2nd January, 1911. The 
voters ’ list was finally revised and certified on the 28th October, 
1910. The 5 persons whose votes are in question were all upon 
the list as tenants. Pour of them had ceased to reside in the 
municipality before the voters’ list was certified. One of them 
became non-resident afterwards, namely, on the 5th December, 
1910. The total number of votes polled, including those of the 
before-mentioned 5 persons, was 234. The votes for the by-law 
were 142, and against 92. The learned County Court Judge 
proposed to deduct these 5 votes from the total, leaving as the 
actual total 229. And he also proposed to deduct the whole of 
the 5 votes from the votes cast in favour of the by-law, which 
would have left 137, or less than the required three-fifths of the 
proper total, and would have so certified but for the prohibition 
granted by Middleton, J. 

The Divisional Court was of the opinion, following the Salt- 
fleet case, 16 O.L.R. 293, that the County Court Judge had no 
legal authority to disallow the 4 votes given by the tenants who 
had ceased to reside in the municipality before the voters’ list 
was- certified, and that in that case it was unnecessary to deal 
with the fifth, who had ceased to so reside thereafter, because 
the disallowance of that vote would not affect the result. The 
Court further held that the inquiry directed by Middleton, J., 
into how a person had voted, would be contrary to the provisions 
of sec. 200 of the Consolidated Municipal Act, 1903. 

The questions involved are, therefore, three, namely: (1) 
were the 5 tenants, or any of them, disqualified because they 
had ceased to reside in the municipality before the voting; (2) 
had the County Court Judge power, on a scrutiny held under 
sec. 369 of the 'Consolidated Municipal Act, 1903, to disallow 
such votes, or any of them; and (3), if they were properly dis- 



346 



ONTARIO LAW REPORTS. 



[VOL. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Garrow, J.A. 



allowed, what should follow — should they he deducted, as the 
County Court Judge proposes to do, from the affirmative vote, 
without inquiry, or should There be an inquiry, as Middleton, J., 
seemed to think, and the deduction made as the result of such 
inquiry ? 

By sec. 141 (1) of the Liquor License Act, a local option 
by-law must, before being finally passed, be approved by the 
“ electors of the municipality’’. And Who are such “electors” 
is determined by sec. 86 of the Consolidated Municipal Act, 
1903. We are concerned here only with tenants, and their right 
to vote, or in other words, to be “electors” of the municipality. 
These are provided for by clause “secondly” of sec. 86, which 
says : ‘ ‘ All residents of the municipality who have resided 
therein for one month next before the election, and who are, or 
whose wives are, at the date of the election, tenants in the muni- 
cipality. ” They must, of course, in addition, be upon the voters’ 
list used at the election. 



Residence alone is not sufficient, nor is being upon the voters’ 
list, without residence, sufficient. Both must exist to qualify the 
tenant voter. And, that being so, it is perfectly clear that none 
of the 5 was qualified or entitled to vote on the by-law in ques- 
tion. The Ontario Voters’ Lists Act, 7 Edw. VII. ch. 4, sec. 
24, was relied on as the foundation 'for a contrary view. The 
one statute, however, is of as much force and virtue as the other, 
unless the later one was intended to repeal the earlier, of which 
there is not the very slightest indication. And both must, 
therefore, be read together, as, in my opinion, they can be with 
perfect harmony, as expressing the law upon the subject. No 
one disputes the finality of the voters’ list as expressed in sec. 
24 of the Voters’ Lists Act. However disentitled to be upon 
the list, if a person is upon it, and conforms to sec. 86 of the 
Municipal Act as to residence, such a person’s vote cannot, I 
think, be questioned. It was said in the Orangeville case, 20 
O.L.R. 476, at p. 479, by Meredith, C.J., that the only para- 
graph of sec. 24 of the Voters’ Lists Act which is applicable to 
a municipal election, or a vote on a by-law, is the first, and that 
paragraph 2 is applicable only to elections under the Ontario 
Election Act. I am, with deference, unable to agree with the 



XXVI.] 



ONTARIO LAW REPORTS. 



347 



latter statement. There is nothing in the Election Act requir- 
ing a voter to reside in any particular municipality after the 
voters’ list is made up and certified, hut he must continue to 
reside in the electoral district to entitle him to vote at an elec- 
tion to the Assembly. The words “within the municipality,” 
followed by “or within the electoral district,” would, therefore, 
make the former words meaningless and unnecessary, unless 
they are held to apply, as, in my opinion, they do, to municipal 
elections and to the disqualification by reason of non-residence 
for which the Municipal Act provides. 

Clause 2 of sec. 24 should, perhaps, have contained a refer- 
ence to the Municipal Act, as well as to the Ontario Election 
Act. As it is, its proper construction is, I think, to regard the 
later words, ‘ ‘ and who by reason thereof are, under the provisions 
of the Ontario Election Act, disentitled to vote,” as referring 
only to the words, ‘ ‘ or within the electoral district for which the 
election is held,” which immediately precede them. It is un- 
reasonable to suppose that the Legislature, while carefully pre- 
serving the provisions as to residence contained in the Election 
Act, intended, in such an indirect manner, to repeal the very 
similar provisions as to residence contained in the Municipal 
Act, affecting as they do every class of voter except a free- 
holder. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Garrow, J.A. 



The question, however, in .the view I take, is not vital, for 
the real disqualification arises, in my opinion, not under the 
Voters’ Lists Act so much as under the plain language of sec. 
86 of the Municipal Act, which, while fully accepting the finality 
of the voters’ list, cannot be ignored as to events subsequently 
occurring or existing. 

The next question is as to the power and authority of a 
County Court Judge, upon a scrutiny, to deduct such votes — a 
question which has been frequently discussed and upon which 
divergent views have been from time to time expressed. 

The decision of the Divisional Court in the Saltfleet case, 
16 O.L.R. 293, seems to mark an epoch. Teetzel, J., before 
whom the matter first came, was of the opinion that the County 
Court Judge had no power to question the right of any voter 
to vote, or to disallow any vote, and that his power was confined 



348 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Garrow, J.A. 



[VOL. 



to compelling the production before him of the voters’ lists and 
all material used at the election, and hearing evidence, as he 
might consider necessary, with reference to the ballots, so that 
he might ascertain, exactly the number of ballots cast for and 
against respectively, and that he might determine, upon some- 
thing more than 'the mere ballot itself, if necessary, as to its 
validity or invalidity as a ballot. The appeal to the Divisional 
Court was, upon the facts, dismissed with costs. But, in the 
judgments of ithe learned Chancellor and Magee, J., a larger 
view was taken of the County Court Judge’s powers, which 
view has since, though frequently anathematised — see per 
Anglin, J., in In re McGrath and Town of Durahm (1908), 17 
O.L.R. 514; per Meredith, C.J., in the Orangeville case, 20 
O.L.R. 476; and per Riddell, J., in Re Ellis and Town of Ren- 
frew, 21 O.L.R. 74 — been followed. 



The view of the learned Chancellor is set out on p. 302 of 16 
O.L.R. As will be seen, he regarded the scrutiny in such a 
case as something more than a simple recount, the extent of it 
to be measured ‘ ‘ by what can be done on inspection of the ballot 
papers, and the ascertainment of what votes are void ex facie, 
and the scope of investigation contemplated by the exceptions 
to the finality of the voters’ list.” Earlier on the same page, he 
had said that a subsequent change of residence, which would 
disqualify, might be investigated under sub-clause 2 of sec. 24 
of the Voters’ Lists Act, but not a subsequent change of status. 

With a subsequent change of status we have nothing to do 
here. We are dealing only with the case of non-resident ten- 
ants whose names are upon the voters’ list; and, with deference, 
it seems to me to be a matter of perfect indifference when such 
non-residence began, whether before or after the voters’ list 
was certified, if in fact it continued to exist down to within one 
month of the election or vote, as the case may be. The inquiry 
in both cases is wholly as to a state of facts existing subsequent 
to the perfection of the voters’ list, and is in no respect in 
derogation of its finality, the point at which the inquiry in both 
cases must begin. 

I, therefore, agree with the decision in the Salt fleet case, as 
far as it goes, with respect to the power of the ‘County Court 



XXVI.] 



ONTARIO LAW REPORTS. 



349 



Judge to disallow the vote of a tenant because of non-residence 
arising after the list was certified ; but I go further and say that, 
in my opinion, no valid distinction can be drawn between that 
case and the case of the non-resident tenant who was actually 
non-resident when the list was certified, and afterwards so 
continued. 

I quite agree that a scrutiny is something more than a 
recount. That it was intended to be something more is clearly 
made manifest by the circumstance that the ordinary recount, 
provided for in the case of municipal elections by sec. 189 of 
the 'Consolidated Municipal Act, is also applicable to the case 
of a vote upon a by-law, that section 'being one of those intro- 
duced by sec. 351 — a circumstance, it seems to me, which has 
not always been kept clearly in mind in dealing with the subject. 
And that section (189) seems to make short work of another 
matter upon which those who hold the narrower view have 
occasionally built, namely, that the scrutiny is to be of the ballot 
papers, which, they say, is not the equivalent of a scrutiny of 
the votes. But throughout that section “ ballot paper” and 
“vote” are used indiscriminately as representing and meaning 
the same thing — in my opinion, the only sensible view. 

Then as to the third point, what is to be done with the dis- 
allowed votes? And as to that, the only question is, should 
they all be deducted, as the learned County Judge thought, 
from the affirmative votes? Middleton, J., was of the opinion, 
evidently, in referring the matter back to the learned County 
Court Judge, that the voters whose votes were disallowed could 
be made to disclose in what way they had voted, upon the 
ground that they were not voters, and therefore not entitled to 
the protection of sec. 200 of the Consolidated Municipal Act. 
But I am, with deference, unable to accept that view. 

In the Orangeville case, 20 O.L.R. Meredith, C.J., at p. 483, 
suggested, without determining, that in such a case the County 
Court Judge should not make the deduction, but simply certify 
the facts to the council. That view also seems to me, with defer- 
ence, to be unsound. Under sec. 371, the only person who can 
“determine whether the majority of the votes given is for or 
against the by-law” is the County Court Judge. The council 

24 — XXVI. O.L.R. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Garrow, .J.A. 



350 


ONTARIO LAW REPORTS. [vol. 


C. A. 
1912 


could only act on his certificate determining the result one way 
or the other. 


Re 

West 

Lorne 

Scrutiny. 


The subject is one of much difficulty. In the absence of the 
ballots themselves, it is impossible to arrive at a perfectly satis- 
factory result, nor, in my opinion, would the result he much 


Garrow, .T.A. 


more satisfactory if it was possible to examine under oath the 
voter, who, if dishonest, knowing that he could not be found out, 
could easily inflict further injury upon the side against which 
he actually voted by pretending that he voted upon that side. 
In some cases, perhaps, evidence, more or less reliable, might 
be got as to the habits and associations of the voter which might 
raise a presumption as to which way he had probably voted. A 
hotel-keeper, a bar-tender, or other liquor-seller, it might fairly 
be presumed, would probably vote against such a by-law, while 
a member of a temperance organisation, or one who, without 
being a member, was an abstainer in practice, would probably 
vote the other way. And yet such evidence could not go very 
far, for one object of the secret ballot is to protect the voter in 
the expression of his honest convictions, even where his associa- 
tions and the company he keeps, and such convictions, do not, 
as must sometimes happen, agree. 

Upon the whole, after much consideration, I am not pre- 
pared to say that the learned County Court Judge was wrong 
in proposing to deduct the disallowed votes from the total of 
those cast in favour of the by-law. That seems to have been 
for so long the practice that, if a change is desired, it should 
come through legislation. 

The result is, that, making such deduction, the by-law has 
not received the requisite majority, and the County Court 
Judge should certify accordingly. 

The appeal should, therefore, to the extent I have indicated, 
be allowed; but, under the circumstances, there should, I think, 
be no costs, either here or below. 

Magee, J.A. : — Upon the scrutiny, under sec. 369 of the Con- 
solidated Municipal Act, 1903, the County Court Judge has 
found 142 ballots marked in favour of the by-law and 92 against 
it, and has rejected 6 ballots as improperly or insufficiently 



XXVI.] 



ONTARIO LAW REPORTS. 



351 



marked. But he has gone beyond mere inspection of the ballot 
papers, and on inquiry has found that 5 persons deposited ballots 
whose names were on the voters’ list as tenants, but who had for 
more than a month before the polling been and then were non- 
residents of the municipality, and 4 of them in fact were non- 
resident at the time of the certification of the list and continu- 
ously thereafter. He considered the 5 not entitled to vote ; and, 
having no evidence as to how they marked their ballot papers, 
he could not certify that the 142 votes nor more than 137 were 
cast for the by-law. The Divisional Court has prohibited him 
from certifying that the by-law was not carried, and this appeal 
is from that order. 

Four questions arise. First, has the County Court Judge the 
right, upon the scrutiny, under sec. 369, to go beyond an inquiry 
how the ballot papers actually received and deposited were 
marked (involving, if necessary, an inquiry as to lost and spuri- 
ous ballots), and to inquire into the right of persons to vote 
whose names are upon the voters ’ list and who have received and 
deposited their ballot papers? Second, if so, can he reject the 
votes of persons entered on the voters’ list as tenants who were 
not in fact residents of the municipality at the time of the final 
revision of the voters’ list, and who have continued to be non- 
resident until after the polling day, and who in fact had not any 
other right than as tenants"? Third, can a person who, at the 
time of polling, had no right to vote, but whose name was on the 
voters’ list, and who received and deposited a ballot paper, be 
required to state how or whether he marked it? And fourth, 
what is the result if it be found that some of those who voted 
had no legal right to vote, and there is no evidence as to how 
they voted? 

The appellant, D. H. Mehring, who petitioned for the scru- 
tiny, contends for an affirmative answer to the first and second 
questions, and for the negative to the third, and on the fourth 
that the number of illegal voters must be deemed to be possible 
supporters of the by-law. The respondent, Dugald McPherson, 
a supporter of. the by-law, who applied for the prohibition order 
appealed from, contends for the opposite. The anomalous spec- 
tacle is presented of friends of the by-law trying to uphold 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Magee, J.A. 



352 



ONTARIO LAW REPORTS. 



[VOL. 



0. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Magee, J.A. 



votes which they believe to have been cast against it; while the 
opponents wish to have these votes rejected without inquiry on 
which side they were. 

The first question was decided in the affirmative in 1908, by 
a Divisional 'Court in In re Local Option By-law of the Township 
of 8 alt fleet, 16 O.L.R. 293 ; and, despite the objections which 
have been made thereto, I cannot say that I have any doubt as to 
the conclusion there arrived at. As then pointed out, the history 
of the legislation, the reasons for it, the procedure adopted, the 
language copied from other enactments, the manifestly designed 
analogy between the proceedings for by-laws and municipal and 
provincial elections, and the absence of any other provision for 
contesting the result where the clerk declares a by-law to have 
been defeated, all point to the intention in 1876 to use the word 
“scrutiny” in the sense in which it is ordinarily and in other 
enactments used, and clearly to distinguish it from a mere re- 
count on examination of the ballot papers themselves. The pro- 
vision for this scrutiny was made in 1876, and has remained un- 
changed and it should be interpreted as then. It was then 
called “scrutiny of the ballot papers,” as it is still; and in 1880, 
in 43 Viet. ch. 27, sec. 16, it was manifestly this scrutiny which 
was referred to as “scrutiny of the votes,” as it yet is in the 
corresponding present section, 366, and in sec. 366a, on a similar 
subject. Indeed, only in secs. 366, 366a, and 369, do I find the 
word “scrutiny” used, though a scrutiny is manifestly intended 
and necessary in other proceedings. As pointed out in the Salt- 
fleet case, votes and ballot papers were evidently considered 
interchangeable expressions. 

The scrutiny, then, in my opinion, involves the inquiry as to 
the right to vote, and is not a mere recount which, with the right 
to take evidence necessary for a recount (sec. 189, 7 Edw. VII. 
ch. 40, sec. 4), is elsewhere provided for. But, in the inquiry as 
to the right to vote, regard must be had to the enactment as to 
the finality of voters’ lists. 

That brings us to the second question, as to whether the non- 
resident tenants could properly vote. In Be Ellis and Town of 
Renfrew, 23 O.L.R. 427, it was pointed out that the provisions 
in the Voters’ Lists Act, 1907, 7 Edw. VII. ch. 4, sec. 24, as to 



ONTARIO LAW REPORTS. 



353 



I XXVI.] 



the list when finally revised being final and conclusive evidence 
| upon a scrutiny, was intended only for provincial and muni- 
. cipal elections, and not for voting on by-laws — and that the list 
itself was not the one to be used for the latter purpose, but, it 
being the list of all and only those entitled to vote at elections, 
the clerk had to make from it the list to be used for the by-law. 
In no other sense is it made final for by-law purposes. But the 
effect for the present case is practically the same. Section 24, 
in clause 2, expressly excepts from the finality of the list “per- 
sons who, subsequently to the list being certified, are not or have 
not been resident either within the municipality to which the 
| list relates, or within the electoral district for which the election 
is held, and who by reason thereof are, under the provisions of 
the Ontario Election Act, disentitled to vote.” In the Orange- 
ville case, 20 O.L.R. 476, the learned Chief Justice of the Com- 
mon Pleas considered that these last words, referring to the 
latter Act, controlled the whole of clause 2, and that, therefore, 
it does not refer to municipal elections. But, with much defer- 
ence, I think he has not given due weight to the fact that the 
Election Act does not require residence, after the list, in the 
municipality, but only in the electoral district (8 Edw. VII. 
ch. 3, secs. 19 and 95, and forms 17, 18, 19) ; whereas the Muni- 
cipal Act (in secs. 86 and 112) does require residence in the 
municipality; and the reference in clause 2 to the latter would 
be meaningless if the clause is inapplicable to municipal elec- 
tions. I am, therefore* of opinion that clause 2, as far as the 
word 1 1 relates, ’ ’ must in this case be applied. 

Even assuming that to be so, the Divisional Court considered 
that the votes of the 4 tenants referred to could not be struck 
off, as they had not changed their status, and the list was con- 
clusive that they were resident tenants. It has not been con- 
tended that the fifth should not be struck off if the list is not 
final. The result would be that he who was longer a resident 
would be in a worse position than those who had severed their 
connection with the municipality long before, and who in fact 
were wrongfully on the list, while he was rightfully on it. I 
: find nothing in the statute to force us to such a conclusion. The 

words are, plainly, “Persons who subsequently to the list being 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Magee, J.A. 



354 



ONTARIO LAW REPORTS. 



C.A. 

1912 

Re 

West 

Lorne 

Scrutiny. 

Magee, J.A. 



[VOL. 



certified are not or have not been resident.” It does not say, 
“persons who subsequently have become not resident or persons 
who have subsequently ceased to be resident,” but “persons 
who subsequently are not resident.” I confess, with much 
deference to the opinions expressed, that I cannot see any war- 
rant for adopting any other than the ordinary interpretation, 
or striving for a result so opposed to the policy of the Act 
against non-residents having a voice in the municipality’s 
affairs. Reference has been made in some of the cases to the 
judgment of the learned Chancellor in the Salt fleet case as if 
he had expressed an opinion that a continued non-residence 
would not disqualify ; but I do not read it as saying more than 
that subsequently occurring non-residence would disqualify, 
which is evidently all that he meant to deal with. In my opinion, 
the learned County Court Judge rightly held all these 5 votes 
to be invalid. 



It is not suggested that there is any means of proving on 
which side they or any of them were cast unless by calling the 
voters themselves to disclose it. If any one or more of them had 
intentionally displayed his ballot after marking it, though he 
might be punished for doing so, I do not see why any one who 
saw it and who was not sworn to secrecy should not be admitted 
to prove, if he could, how it was marked. 



In the absence of evidence of that sort, we come to the third 
question. Section 200 of the Consolidated Municipal Act, 1903, 
declares that no person who has voted at an election shall, in 
any legal proceeding to question the election or return, be 
required to state for whom he has voted. Section 351 makes that 
section apply also to voting on by-laws. The provision in sec. 
200 goes back to 1874 (38 Viet. eh. 28, sec. 34). Like provision 
was made in 1874, as to provincial elections, by 37 Viet. eh. 5, 
sec. 32 (now 8 Edw. VII. eh. 3, sec. 166), and as to Dominion 
elections by 37 Viet. ch. 9, sec. 77. Section 200 should be con- 
strued in the same way as those enactments. Up till 1906, the 
provincial election law was such that if, upon a scrutiny, it was 
found that a person not entitled to vote had deposited a ballot 
paper, it could be traced and inspected by the Court and re- 
jected. There was and is no lawful way of doing so in municipal 




XXVI.] 



ONTARIO LAW REPORTS. 



355 



or Dominion elections, nor since 1906 in provincial elections. 
Thus it was the declared policy of the Legislature that, in case 
of necessity, upon a scrutiny there should be no secrecy for an 
invalid vote. Yet, side by side with that policy, there was this 
broad provision that “no person” who voted should be “re- 
quired to state how he voted. ” It is not even limited by saying 
“no voter.” To some extent, it might be said that the very 
provision for unearthing the ballot would indicate that the 
voter could not be asked what it would shew. In rendering the 
ballot now untraeeable legally in provincial elections, a scrutiny 
has not been done away with (see sec. 24, already referred to) ; 
and the necessity for evidence of some other sort as to the 
marking of the ballot is greater ; but the wording of the section 
protecting the voter remains the same, and must still have the 
same interpretation. Indeed the change has emphasised the 
policy of secrecy. But the fact that, when the provincial Act 
37 Viet. ch. 5, sec. 32, was enacted, entitling the voter to keep 
silent, the law made other provision for obtaining the evidence, 
is, I think, a reason for giving the Ontario law even a more 
liberal and not a less liberal interpretation in favour of the 
voter than the Dominion law which had the same wording. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Magee, J.A. 



The Ontario municipal provision (now sec. 200) should have 
the same interpretation as that in the Ontario Election Act. 
Until the case of the Orangeville by-law, 20 O.L.R. 476, the pre- 
cise question here does not seem to have arisen. There have been 
several cases in which lawful voters were not allowed to be asked 
or to state on oath how they had marked their ballots. In the 
Lincoln Election Case , 4 A.R. 206, it is pointed out that the 
protection of the statute is around the voter until his vote is 
proved invalid — but it was not absolutely decided that, if in- 
valid, the protection would be removed. I fully agree with the 
view of Mr. Justice Britton in the present case (25 O.L.R. at p. 
296), that, as a vote may have been given in perfect good 
faith, although it turns out that the right to it did not exist, it 
is important that, unless the law clearly provides otherwise, 
the person honestly casting it should have the benefit of secrecy. 
The opinions given upon the Dominion Act, although referring 
to rated votes, are wide enough in their terms to include those 



356 



ONTARIO LAW REPORTS. 



C. A. 
1912 



Re 

West 

Lorne 

Scrutiny. 

Magee, J.A. 



[VOL. 



turning out to be invalid ; and, if voters willing to tell how they 
voted are excluded from doing so by the policy of the law, much 
more should those who, as probably in this case, would be un- 
willing to do so. I am of opinion that they cannot be asked. 
There is much, however, to be said in favour of the contrary 
view. In the United States the result of decisions is thus stated 
in 15 Cyc. 424, under “ Elections:” “And it would seem that 
the same considerations of public policy which relieve the voter 
himself from being compelled to testify for whom he voted 
should prevent other proof of that fact. But this protection is 
extended to legal voters only. When it has been established that 
a voter was not a legal elector, any person having requisite 
knowledge may testify as to the person for whom he voted, and 
he may be compelled himself to disclose for whom he voted, un- 
less he claims the other and different privilege of refusing to 
criminate himself. . . . According to the weight of authority 
the exemption from obligation to disclose the character of his 
vote can be claimed only by the voter himself. But on the other 
hand it has been held that in an election contest voters cannot 
testify at all as to how they voted. Where it does not appear 
from direct testimony for what candidate an unqualified voter 
voted, the fact may be shewn by circumstantial evidence. ” 

The fourth question is one which might arise upon any 
Dominion, provincial, or municipal election, as well as upon any 
by-law. It is not certain and cannot be made certain how any 
of the 5 illegal votes were cast. They may have been in favour 
of the by-law. If so, it would only have 137 supporters, and 
therefore not the requisite three-fifths. If any one of the 5 
voted against it, then it would certainly have 138 against a 
possible 91, which would be sufficient. On the affidavits there 
is every probability that at least two, who were well known 
opponents, voted against it, but probability is not enough. The 
question turns upon the issue involved. 

In the Lincoln case, 4 A.R. 206, at p. 212, the Court said: 
“The solution of this question seems to follow from a con- 
sideration of the issue raised. The respondent has been re- 
turned as duly elected. The petitioner, in claiming the seat 
for Mr. Neelon” (the unsuccessful candidate), “undertakes to 



i 



XXVI.] 



ONTARIO LAW REPORTS. 



357 



prove that he received the majority of legal votes. That pro- 
position he is hound to establish affirmatively. Where it is 
sought to diminish the majority of the respondent” (Mr. 
Rykert, who had been returned as elected) “by a vote, two 
things must be proved : firstly, that the voter had no vote ; 
and secondly, that he assumed to vote for the respondent. In 
the case put, the second is incapable of proof, and the peti- 
tioner therefore fails to prove that the vote was cast for Rykert 
and not for Neelon. ” Similarly in the United States the result 
of the authorities is thus stated in 15 Cye. 416 : “In a statutory 
contest at the suit of a defeated candidate, the certificate of 
the board of canvassers is primd facie evidence of the result, 
and the contestant, whatever may be his ground of complaint, 
has the burden of establishing it. Where the validity of the re- 
turns is not attacked on the ground of fraud, it is not enough 
to shew that illegal votes were cast; it must be shewn that a 
sufficient number of such votes were cast for the successful 
candidate to change the result.” 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Magee, J.A. 



If the scrutiny could be looked upon as an appeal from the 
clerk’s certificate that the by-law was carried, and as an affirma- 
tive assertion that more than two-fifths voted against it, then 
this case w T ould be governed by the principle of the decision in 
the Lincoln case, and the onus would be upon the opponents of 
the by-law to shew that the clerk ’s return was wrong ; and, fail- 
ing affirmative proof of it by shewing that all 5 persons voted 
for the by-law, the clerk’s return of 141 against 92 would stand, 
except as amended by the Judge by the addition of the one im- 
properly rejected ballot. 

But the scrutiny cannot, I think, be so looked upon. The 
question is not the same as the question between two candidates, 
where each asserts that he has been elected, and not merely 
that the other has not been elected. The scrutiny may be asked 
for by any elector, and he need not even have voted. He has 
only to Shew to the Judge reasonable grounds for a scrutiny, 
and does not need to assert that a different result should be 
arrived at. He simply asks a more certain result. It might be 
that mistakes in one polling subdivision would be offset by 
those in another, the ultimate result being the same. He might 



358 


ONTARIO LAW REPORTS. [vol. 


C. A. 
1912 


'be a supporter of the by-law who believed that a greater major- 
ity should be declared. In such a case, he should not be deemed 


Re 

West 

Lorne 

Scrutiny. 


to be asserting that the bad votes were cast against the by-law, 
and, because he failed in proving it, meet the result that they 
should be assumed not to have been against it. The petitioner 


Magee, J.A. 


for a scrutiny does not, I think, raise any issue other than the 
original one — whether or not three-fifths of the legal voters 
have decided for the by-law — although he does render himself 
liable to costs. 

Such a petitioner is not in the same position as one making 
an application to quash a by-law. It might well be that the 
onus would be upon the latter to shew that the by-law was 
defeated; and, if he failed in affirmative proof, the by-law 
would stand. Whatever the result would be upon such an appli- 
cation to quash, upon a scrutiny under sec. 369 the whole ques- 
tion is open, and the Judge is not to inquire merely as to the 
allegations made in the petition to justify the scrutiny; but, 
having been satisfied that there was reasonable ground for one, 
he is, under sec. 371, to determine, not the truth of those allega- 
tions, nor the truth of the clerk’s return, but “ whether the 
majority of the votes given is for or against the by-law” — that 
is, the necessary majority of legal votes — and he is to certify 
the result to the council. The Judge can arrive at the result 
only upon the evidence before him, which is here that five per- 
sons voted who should not have done so, and they may or may 
not all have voted for the by-law; and, therefore, he cannot 
say that it has been carried. 

In my opinion, therefore, the prohibition should not have 
been granted, and the appeal should be allowed without costs. 

I regret to have to come to this conclusion in this case, be- 
cause there is every reason to believe that the by-law was law- 
fully carried; but it rests with the Legislature to say whether 
it will permit evidence as to the way in which illegal voters 
marked their ballots. The result of the present condition of 
the law is, that a man who has no vote may first have his vote 
added to those opposing a by-law, and then deducted from the 
number of those supporting it, and thus count twice as much as 
that of the lawful voter. 






XXVI.] ONTARIO LAW REPORTS. 

Meredith, J.A. (dissenting) : — This case involves the ques- 
tion whether a scrutiny, under sec. 369 of the Consolidated 
Municipal Act, 1903, is a scrutiny of votes polled, and conse- 
quently a controverted election trial; or is, as it purports to be, 
a scrutiny of “ the ballot papers” only. 

The question arose in the case of In re Local Option By-law 
of the Township of Saltfleet, 16 O.L.R. 293, in which a Judge 
had held that the enactment meant no more than it, in plain 
words, said — “a scrutiny of the ballot papers:” but, upon an 
appeal to a Divisional Court, that ruling appears to have been 
differed from to some extent, but to just what extent is not 
made very plain. Boyd, C., dealt with the question in an 
addendum only to his judgment, in which he intimated that the 
case had not been very fully argued. Mabee, J., agreed with 
him, without giving any reasons: but Magee, J., dealt with 

this question at considerable length, and went the full length 
of holding the scrutiny to be an unlimited scrutiny of the votes 
polled. 

For several reasons, I am quite unable to agree with him in 
| that conclusion. 

In the first place, it is in the teeth of the plain and simple 
words of the legislation, “a scrutiny of the ballot papers and 
I decline to attribute to the Legislative Assembly a lack of 
knowledge of the meaning of such words, under any circum- 
stances; but the more so, because, when a scrutiny of votes 
polled has been so meant, that representative body has found 
no difficulty in providing for it in quite appropriate words : see 
sec. 76 of the Ontario Controverted Elections Act, R.S.O. 1897, 
Ch. 11 : the words there employed being, ‘ ‘ a scrutiny of the votes 
polled at the election.” It will be found safer, in all cases, to 
attribute to the Legislature as complete a knowledge of plain 
English as that which most of us possess. 

In the next place, if this be not a scrutiny of the “ papers ” 
only, but, in truth, a controverted election trial, then a special 
tribunal is constituted for the trial of such a case, and, accord- 
ing to the general rule, the finding of such a tribunal is not 
subject to review elsewhere, unless some provision for appeal 
or review is made in the legislation, and there is, in this legisla- 



359 

C. A. 

1912 

Re 

West 

Lorne 

Scrutiny. 

Meredith, J.A. 



360 



ONTARIO LAW REPORTS. 



{VOL. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Meredith, J.A. 



tion, no such provision in any shape or form. I cannot think that 
any one will seriously contend that the Legislature meant that 
the judgment of a single County Court Judge, upon such a pro- 
ceeding, should be final and conclusive as to the validity of any 
by-law — money or local option — which may be the subject of the 
voting, the ballot papers of which are to be so scrutinised. On the 
other hand, if such general rule is not to apply — and generally 
the cases seem to have been dealt with as if it did not — then we 
should have the farce of a costly scrutiny to no binding pur- 
pose; a costly scrutiny to be gone over anew in any attack 
which might be made upon the by-law in the usual way. So 
that, whichever way it is looked at, it seems hardly possible that 
reasonable men could have desired such an effec.t. Whilst, if 
the scrutiny be restricted to the ballot papers — in the nature 
of a recount — it would be quite reasonable, and quite in accord 
with the provisions for a speedy recount, which, by legislation, 
is now commonly given after all elections. 



Again, the proceedings must be commenced within the usual 
time for beginning recount proceedings, fourteen days after the 
declaration of the result of the poll; whilst the time-limit for 
motions to quash is, generally speaking, not less than a year. 
Preparing for a scrutiny of the votes would ordinarily require 
more time than preparing for attacking the by-law on other 
grounds; and, beside this, no provision is made for notice of 
objections to voters; nor is there anything to indicate, in any 
manner whatever, that the qualifications of voters, specially to 
be objected to, or the qualification of every voter who voted, is 
to be, or may be, inquired into in this hurried fashion: on the 
contrary, the Judge is to proceed upon an “ inspection of the 
ballot papers not an inquiry into the qualification of voters, 
and upon such evidence as he may deem necessary — evidence as 
to ballot papers, not as to qualification of voters, which, upon a 
scrutiny of votes polled, would not be in the mere discretion 
of the Judge, but would be such admissible evidence as the 
parties saw fit to adduce. 

And again, the ruling in the Salt fleet case has been frequently 
questioned, so that hitherto the weight of judicial opinion 
greatly preponderates against the view that a scrutiny of ballot 



XXVI. ] 



ONTARIO LAW REPORTS. 



361 



papers is a scrutiny of the votes polled, involving an inquiry 
into the qualifications of the voters. 

And lastly, even if the words be considered of doubtful im- 
port, is a Court of such extensive jurisdiction, and one of such 
extraordinary power — whether wholly conclusive or wholly in- 
conclusive, as I have before mentioned — to be created on doubt- 
ful language? 



C. A, 
1912 

Re 

West 

Lorne 

Scrutiny. 

Meredith, J.A. 



And, if this is not enough, look at the result : the by-law is 
to be judicially declared to have been defeated at the poll — 
with all the binding consequences of such a defeat of a local 
option by-law at the polls — though in truth it may have been, 
and in all probability was, carried: an injustice arising wholly 
from a disregard of the plain words of the legislation; an un- 
fortunate attempt to improve upon well-considered legislation. 
Let the scrutiny be, as the Legislature has plainly said, of the bal- 
lot papers, and you have certainty, finality, and justice : certainty 
and finality in the County Court Judge’s scrutiny of the ballot 
papers, and justice from the ordinary courts, with the usual 
rights of appeal, in making the scrutiny of the qualifications 
of voters, and in, in such a case as this, setting aside the by-law 
because of the inconclusive character of the poll; leaving it to 
the contestants to try it over again if they choose to; which is 
the only just consequence of an indecisive election poll or any 
race. 



Against all these, and other, reasons for treating the Legisla- 
ture as if its members knew the meaning of plain words, these 
things have been urged : — 

In the first place, it is said that the provision, contained in 
sec. 372, giving to the Judge, upon the scrutiny, the like power 
and authority as those which he has upon the trial of the validity 
of an election, shews that each is really an election trial. But 
there is no warrant for any such contention: the power and 
authority is expressly limited to matters properly ‘ ‘ arising upon 
the scrutiny. ’ ’ It was necessary to confer power and authority 
to enable the Judge to prosecute the inquiry, and, “upon in- 
specting the ballot papers,” to determine, in a summary man- 
ner, “whether the majority of the votes given is for or against 
the by-law”, and what shorter or better method could be 



362 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Meredith, J.A. 



[VOL. 



adopted than in saying that, so far as they are applicable to a 
scrutiny of ballot papers, the procedure upon an election trial 
shall be applicable, as this section in effect provides ? 

Then it is said that the Legislature could not have meant 
a mere recount, because it had, in an earlier section of the Act, 
provided for a recount in municipal elections (sec. 189) : and 
had, by another section (sec. 351), made this section applicable 
to voting on money and local option by-laws. But, in truth, 
that is not so; nor, if it were, would such a consequence neces- 
sarily follow. Under section 351, secs. 138 to 206, except sec. 
179, are incorporated with the provisions respecting the poll in 
regard to money by-laws; and local option by-laws are, under 
the local option enactments, put in the same category as money 
by-laws; but those sections are so incorporated only in “so far 
as they are applicable;” and the rule is, that, where a special 
enactment provides for a certain case, the provisions of a gen- 
eral enactment covering it also are inapplicable : so that, here, 
it seems to me to be plain that, the provision of sec. 369 specially 
applying to such a by-law, sec. 189 is inapplicable, and so ex- 
pressly excluded under the plain words of sec. 351. And there 
is abundant reason for that, for money by-laws are by-laws of 
the most important character, and the provisions of sec. 369 
are of a wider and more protective character than those of sec. 
189 ; the one is a scrutiny of the ballot papers, the other a re- 
count of the votes only. Upon a scrutiny of the ballot papers 
the question of the validity of each ballot may be inquired 
into; a thing of no small importance when the corrupt dealing 
with ballot papers, even by sworn election officers, which has been 
only too frequently proved in election cases some time ago, is 
borne in mind. 

And, lastly, it is said that the Legislature has used, else- 
where, the words “ballot papers” and “votes” indiscriminately, 
and so may be taken to have meant a scrutiny of the votes 
polled, and a scrutiny of the widest character respecting such 
votes, when it has said only that it shall be a scrutiny of ballot 
papers. Again I challenge both the accuracy of the statement 
and the logic of the conclusion if the statement were true. Sec- 
tion 189 is again appealed to; but, instead of that section prov- 



XXVI. 1 



ONTARIO LAW REPORTS. 



363 



ing indiscrimination, from the beginning to the end of it it shews 
a clear discrimination, knowledge, and expression of the obvions 
difference between votes polled and ballot papers. The Jndge 
is to examine the ballot papers and recount the votes recorded 
upon them ; and this discrimination is shewn throughout the 
section, with one possible exception, which appears in sub-section 
(6), where the words “recount all the votes or ballot papers” 
are used ; but even these words shew a discrimination, and would 
be very exact if the word “or” were “and,” because not only 
is it necessary to count the votes but also to count the ballot 
papers, unused and rejected, as well as used and become evidence 
of a vote. If the Legislature knew not the difference between 
a vote and a ballot paper, why use both expressions ? The error 
in asserting that the words “ballot paper,” as used in sec. 369, 
mean vote, ought surely to be evident when it is borne in mind 
that there are unused ballot papers which must be scrutinised 
and counted, as well as, also, used and spoiled ballot papers, to 
be so dealt with ; as well as any corruptly substituted or corruptly 
marked or re-marked ballot papers; for the whole subject of 
ballot papers comes within the scrutiny under sec. 369, though 
not within the recount under sec. 189. 

I can, therefore, find no excuse for attributing to the Legis- 
lature want of knowledge of the meaning of the plain and simple 
words “ballot papers;” and I venture to assert that no existing 
enactment gives any sort of excuse for doing so. 

If this be so, then the County Court Judge had no power to 
enter upon a scrutiny of the votes in regard to the qualification 
of the voters, and was rightly prohibited from doing so ; and it 
is quite immaterial that the grounds upon which the order was 
made were erroneous. 

The next question considered by the Divisional Court was, 
whether the voters in question were qualified to vote ; but I am 
at a loss to understand what power there was to deal with such 
a question in prohibition proceedings: if the County Court 
Judge had jurisdiction to enter upon such an inquiry, whether 
he reached a right or a wrong conclusion is surely not a ques- 
tion that can be dealt with in prohibition ; prohibition is directed 
against an usurpation of jurisdiction only : we must not assume 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Meredith, J.A, 



364 



ONTARIO LAW REPORTS. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Meredith, J.A. 



VOL. 



the power which would rest only in a court having appellate 
jurisdiction over such proceedings; and, as I have before inti- 
mated, no appeal is given from the County Court Judge. 

But, as a majority of the members of this Court considers 
that there is power here to consider the question, I am bound to 
accept that view and to express my opinion upon it; and my 
opinion is, that upon this question also the order of the Divi- 
sional Court was right ; but I would support it also on different 
grounds. 

Whether these voters were qualified or not depends upon 
sec. 24 of the Ontario Voters’ Lists Act, 7 Edw. VII. ch. 4. 

The names of all of them appeared as duly qualified voters 
in the certified list of voters referred to in that section, which 
provides that such list shall, upon a scrutiny such as that in 
question, be final and conclusive as to such qualification to vote. 
There can be no doubt, nor is there any dispute, as to that ; but 
it is contended that, under sub-sec. 2 of that section, such per- 
sons as these voters are taken out of its provisions. The sub- 
section is in these words: “2. Persons who, subsequently to the 
list being certified, are not or have not been resident either 
within the municipality to which the list relates, or within the 
electoral district for which the election is held, and who by rea- 
son thereof are, under the provisions of the Ontario Election 
Act, disentitled to vote : ’ ’ and, under the section itself, such per- 
sons are excepted out of its provisions. 

But, how is it possible to bring these voters, at a municipal 
poll, within its provisions? As plain as any words in the Eng- 
lish language can make it, this exception applies only to voters 
at a provincial election; those who, by reason of such non- 
residence, under the provisions of the Ontario Election Act, are 
disentitled to vote. 

It is said that non-residence in a municipality does not dis- 
entitle under the provisions of the Ontario Election Act, that it 
is enough under it that the residence be within the electoral 
division: but what has that to do with the question? To say 
that, because this provision cannot be made wholly applicable 
to that which alone the Legislature has said it shall apply, any 
Judge may apply it to something else, to which he may think it 



XXVI.] 



ONTARIO LAW REPORTS. 



365 



ought to have been made applicable, but obviously has not, is 
surely legislation, not adjudication. We ought not to forget that 
we are not now legislators, nor even here acting as statute- 
revisers. 

Can any one, in reason, say that the sub-section is not limi- 
ted to those who are disentitled under the Ontario Election Act : 
and can any one in reason say that any of these persons are so 
disentitled Surely not. 

Nor is the sub-section inapplicable to those to whom it is so 
limited. It plainly excepts all those who are disentitled under 
the provisions of the Ontario Election Act ; and it is quite imma- 
terial whether the disjunctive words “ within the municipality” 
are or are not superfluous or otherwise useless. 



0. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Meredith, J.A. 



It may, or may not be, that the Legislature intended to make 
the sub-section applicable to municipal elections and other muni- 
cipal polls; but that is quite immaterial here, because it is un- 
questionably certain that, whatever was intended, that was not 
done. 

The provisions of sec. 86 of the Consolidated Municipal Act 
of 1903, regarding a tenant’s residence, are not repugnant in 
any way to those of sec. 24 of the Voters’ Lists Act; if they 
were, they would be equally repugnant in respect of other wants 
of qualification, such, for instance, as to the voter being a 
British subject: the two enactments must be read together, and, 
so read, sec. 24 makes the voters’ lists conclusive evidence, upon 
a scrutiny, of qualification in all these respects. The qualifica- 
tions are all necessary, but the inquiry under the Voters’ Lists 
Act is a conclusive consideration of the question of their exist- 
ence or absence. 

The cases upon this subject have, I think, all been rightly 
decided; it is for the Legislature, not the Courts, to cure the 
want of expression including municipal electors in sub-sec. 2, 
if it see fit. 



For a like reason, I am obliged to express my opinion upon 
the last question dealt with in the Divisional Court, a question 
which I should hardly have thought arguable: to give effect to 
the order of Middleton, J., in it, would be to refuse to be guided 
by the plain words of legislative enactment, and to fly in the 



25 — XXVI. O.L.R. 



366 



ONTARIO LAW REPORTS. [vol. 



C. A. 
1912 

Re 

West 

Lorne 

Scrutiny. 

Meredith, J.A. 



face of the whole trend of legislation regarding the secrecy of 
the ballot, without any sort of authority for it. 

I find it impossible to understand how it can truly be said 
that a person who has voted, and whose vote has been counted, 
is not a person who has voted, merely because he may not have 
been a qualified voter. Effect ought to be given to the plain 
meaning of plain language. 

The numbered ballot was in force for years in provincial 
elections, not for the purpose of ascertaining how good votes 
were cast, but for finding out how votes proved to have been 
invalid were cast, so that they might be deducted from the 
proper side; but even that was considered such a menace to the 
secrecy of the ballot that it was wiped out of the statute-law 
entirely. 



But, if there were not these things against the order made 
in this respect, in the first instance, the cure would seem to 
me to be worse than the disease : one who, having no vote, voted, 
and probably swore “his vote in,” would not be unlikely, when 
obliged to say how he voted, to tell an untruth about it ; and so 
the double wrong would most likely be done ; the bad vote would 
remain on the side for which it was cast, and a good one be 
taken from the opposite side. It would be absolutely impossible 
to trace the ballot, and highly impossible that any one but the 
voter would be able to give any testimony as to the way in 
which he actually voted. 



Beside all this, shewing how one man, or several men, voted, 
may, in some cases, shew how others voted, and absolute secrecy 
seems to be needful to give the required feeling of absolute 
security ; and nothing should be done to throw doubt upon the ab- 
solute secrecy of the ballot, where voting by ballot is in force. To 
compel any one to disclose his vote, or rather to answer upon oath 
any question as to how he voted, would in another way lead 
to the disclosure sometimes of the votes of qualified voters, for 
Judges are not infallible; qualified voters may erroneously be 
held to be unqualified ; and doubt would, in any case, be thrown 
upon that essential of the ballot system, a feeling of absolute 
security in absolute secrecy. 

I would dismiss the appeal. 



XXVI.] 



ONTARIO LAW REPORTS. 



367 



Maclaren, J.A., also dissented, agreeing with the opinion of 
Meredith, J.A. 

Appeal allowed ; Maclaren and 
Meredith, JJ.A., dissenting. 



C. A. 
1912 



Re 

West 

Lorne 

Scrutiny. 



[RIDDELL, J.] 

Fidelity Trust Co. v. Buchner. 1912 

Life Insurance — Benefit Certificate — Beneficiary — “ Adopted ” Daughter — Mav 

Death of — Claim by Infant Children of — Rules of Insurance Society — ^ 

Insurance Act, R.S.O. 1897, ch. 203, sec. 151(3) — Law of Ontario as to 
Adoption — 1 Geo. V. ch. 35, sec. 3 — - Preferred Beneficiaries — Endorse- 
ment in Favour of Beneficiary for Value — Validity — Evidence — Next 
Friend of Infants — Status — Certificate Endorsed as Security for Ad- 
vances — Inquiry as to Amount Advanced. 

Section 3 of 1 Geo. V. ch. 35 is derived from 12 Car. II. ch. 24, sec. 8, and 
carries the law no further than that enactment. Its effect is not to take 
away- any of the rights of a father in respect of the custody of his child, 
but to enable the father to take away the common law rights of others; 
the statute does not exclude the right of the father himself; he cannot 
get rid of his parental right irrevocably by an agreement; such a deed 
or agreement is revocable, even by will. The law of Ontario, strictly 
speaking, knows nothing of adoption; and the term “legal adoption” has 
no meaning, in the proper use of the words. 

Re Davis (1909), 18 O.L.R. 384, followed. 

Re Hutchinson (1912), 26 O.L.R. 113 (since reversed), not followed. 

In 1901, R. became a member of a benefit society, the Royal Arcanum, in- 
corporated in the State of Massachusetts but doing business in Ontario, 
and the society issued- to him in 'Ontario a benefit certificate whereby it 
agreed “to pay . . . to L. H. (adopted daughter) a sum not exceeding 

$1,500 in accordance with and under the laws governing said fund” — that 
is, the beneficiary fund of the society — “upon satisfactory evidence of 
the death of said member . . .” L. H. died in 1909, leaving infant 

children. Thereafter, R. endorsed upon the certificate, under his signa- 
ture and seal, a direction that all benefits thereunder -should be paid to 
the defendant, “who for many years has advanced money to me and kept 
up the premiums, and who is a holder of this certificate for value.” R. 
died a widower and childless in 19.11. The insurance or benefit moneys 
were claimed by the defendant under the endorsement, and also by the 
plaintiffs (next friend), on behalf of the children of L. H., under the 
rules of the society: — 

Held, that, as the society was not incorporated under the Benevolent and 
Provident Societies Act, R.S.O. 1897, ch. 211, the insurance moneys were 
not payable “to the person or persons entitled under the rules” of the 
society (sec. 12); sec. 151(3) of the Insurance Act, R.S.O. 1897, ch. 

203, was applicable (sec. 147) ; and the rules of the society must give 
way to the provisions of the statute so far as inconsistent therewith. 

Gillie v. Young (1901), 1 O.L.R. 368, followed. 

And held, that the infants were not the designated preferred beneficiaries 
of R. ; they were not preferred beneficiaries at all, within the meaning of 
the statute, R. not having been their grandfather in a legal sense; and 
he made a new beneficiary under the provisions of the law in that regard. 

Held, also, that the plaintiffs, as next friend, were not entitled to the in- 
fants’ money; and the infants were not entitled to the money in any case. 



368 



ONTARIO LAW REPORTS. 



[VOL. 



1912 

Fidelity 
Trust Co. 
v. 

Buchner. 



Held, also, that the endorsement on the certificate was valid under the 
statute; and the plaintiffs’ attack upon it, on the grounds that it was 
not read to or by R., and that it was ignored and treated as null and 
void by both R. and the defendant until the death of R., failed upon the 
evidence; and the defendant was entitled to receive the amount due upon 
the certificate, unless the plaintiffs could shew that his advances were 
less than that amount. 

Semble, that the infants would have been entitled to the money under the 
rules of the society, if it had been considered that the rules should prevail. 



Issue as to certain moneys paid into Court by a benefit 
society. 

April 29. The issue was tried before Riddell, J., without a 
jury, at London. 

W. G. R. Bartram, for the plaintiffs. 

J. M. McEvoy, for the defendant. 



May 4. Riddell, J. : — T. R. Rhoder, a manufacturer in a 
small way in London, took out, on the 29th August, 1901, a certi- 
ficate in the Royal Arcanum, whereby that organisation agreed 
“to pay ... to Lucy Hendershot (adopted daughter) a 
sum not exceeding $1,500 in accordance with and under the 
laws governing said fund, upon satisfactory evidence of the 
death of said member . . . provided that said member is in 

good standing at the time of his death, and provided also that 
this certificate shall not have been surrendered by said member 
and another certificate issued at his request, in accordance with 
the laws of the Order.” (Considerable argument was based upon 
the clause “in accordance with the laws of the Order,” but it 
is clear that these words refer simply to a certificate subse- 
quently to be issued, and that they have no relevance in the 
present inquiry.) 

Lucy, having been married to W. P. Hendershot, died in 
1909, leaving her surviving four infant children and her hus- 
band. Thereafter, Rhoder made the following endorsement upon 
the certificate : — 

“The within named beneficiary, Lucy Hendershot, having 
died, I direct that all benefits under the within certificate be paid 
to Urban A. Buchner, who for many years has advanced money 
to me and kept up the premiums, and who is a holder of this 
certificate for value. 




XXVI.] 



ONTARIO LAW REPORTS. 



369 



“ Witness my hand and seal this 6th day of July, 1909. 
“Witness: 

“M. Isabel Blankinship. Thomas R. Rhoder. (L.S.)” 

Rhoder died a widower and childless in 1911 ; a claim was 
made by Buchner that he was entitled to the amount of the 
insurance — a claim was, however, made on behalf of the children 
of the deceased “adopted daughter.” The Royal Arcanum paid 
the money into Court; the Fidelity Trust Company took out 
letters of administration with the will annexed of the estate of 
the deceased Rhoder; and, upon application, an interpleader 
order was made by the Master in Chambers. 

The issue came on for trial before me at the non- jury sittings 
at London during the present week — I heard all the evidence 
and reserved judgment. 

Every suggestion of amendment to the form of the issue was 
strenuously combatted by counsel for the plaintiffs; and I must 
accordingly deal with the issue exactly as I find it. 

In the issue the Fidelity Trust Company are plaintiffs and 
Buchner defendant. 

“The plaintiffs affirm and the defendant denies: (1) that 
. . . infant children of Lucy Hendershot . . . are the 

designated preferred beneficiaries of their grandfather . . . 

T. R. Rhoder by certificate . . . issued by . . . the Royal 
Arcanum . . • (2) that the plaintiffs, as next friend to the 
said infants, . . . are entitled to payment out of Court of 

the said sum ; ( 3 ) that, in the alternative, . . . the plaintiffs, 
as administrators ... of ... T. R. Rhoder, are entitled 
to the said sum, notwithstanding the endorsement dated the 6th 
day of July, 1909, on the said certificate, in favour of the said 
defendant, in that the said endorsement was not read to or by 
the said T. R. Rhoder, and was ignored and treated as null and 
void by both the said T. R. Rhoder and the said defendant until 
the death of the said T. R. Rhoder. . . . And the defendant 
affirms and the plaintiffs deny: (1) that the said defendant is 
the owner of the . . . certificate and entitled to the proceeds 
. . . paid into Court by virtue of the fact that the said insur- 
ance certificate is personal property reduced into possession by 
the defendant, and owned by him as an innocent purchaser for 



Riddell, J, 

1912 

Fidelity 
Trust Co. 
v. 

Buchner. 



370 



ONTARIO LAW REPORTS. 



Riddell, J. 

1912 

Fidelity 
Trust Co. 
v. 

Buchner. 



[VOL. 



value, and by virtue of an endorsement upon the said certificate 
made by T. R. Rhoder to . . . Buchner for value; (2) that 

the defendant is entitled to the said sum paid into Court as the 
proceeds of the said certificate.” 



The claim on behalf of the infants is based upon the rules of 
the society. Section 332 says : “ In the event of the death of all 
the beneficiaries designated . . . before the decease of such 

member, if he shall have made no other or further disposition 
thereof, as provided in the Laws of the Order, the benefit shall 
be disposed of as provided in section 330. . . .” As sec. 326 
provides that a certificate shall not be made payable to a creditor, 
or be held or assigned in whole or in part to secure or pay any 
debt which may be owing by the member; and sec. 327 provides 
that any assignment of a benefit certificate by a member shall 
be void: it is argued for the plaintiffs that the member has not 
made a disposition “as provided in the Laws of the Order,” and, 
consequently, by the provisions of sec. 332, sec. 330 applies. This 
is as follows: “If at the time of the death of a member . . . 
any designation shall fail for illegality or otherwise, then the 
benefit shall be payable to the person or persons mentioned in 
class first, sec. No. 324, if living, in the . . . order of prece- 
dence by grades as therein mentioned, the persons living of each 
precedent grade taking in equal shares per capita, to the exclu- 
sion of all persons living of subsequent enumerated grades, ex- 
cept that in the distribution among persons of grade second the 
children of deceased children shall take by representation the 
share the parent would have received if living. . . .” 

Section 324: “A benefit may be made payable to any or more 
persons of any of the following classes only : — 



“Class First, 

“Grade 1st. — Member’s wife. 



“Grade 2nd. — Member’s children and children of deceased 
children and member ’s children by legal 
adoption. 

‘ ‘ Grade 3rd. — Member ’s grandchildren. ’ ’ 

(Enumerating 13 grades.) 

‘ ‘ In either of which cases, no proof of dependency of the bene- 
ficiary designated shall be required; but in case of adoption. 



ONTARIO LAW REPORTS. 



371 



* 



ptvi. 



proof of the legal adoption of the child or the parent designated 
as the 'beneficiary, satisfactory to the Supreme Secretary, must 
be furnished before the benefit certificate can be issued. 

“ Class Second. 

“(1) To the affianced wife . . .” 

(Enumerating five grades.) 

If (a) the deceased Mrs. Hendershot was the member’s child 
* ‘ by legal adoption, ’ ’ within the meaning of grade second of class 
first in sec. 324; (6) the member did not make any “other or 
further disposition” of the certificate, “as provided in the Laws 
of the Order;” and (c) the provisions of the Laws of the 
Order are to prevail — it is, to my mind, clear that the children 
are entitled to the money. 

It is argued by the defendant that Lucy Hendershot was not 
a child “by legal adoption.” 

In Re Davis (1909), 18 O.L.R. 384, at pp. 386, 387, it is 
said, “The law of England, strictly speaking, knows nothing of 
adoption;” and “parents cannot enter into an agreement legally 
binding to deprive themselves of the custody and control of their 
children; and, if they elect to do so, can at any moment resume 
their control over them.” In Re Hutchinson* (1912), 26 O.L.R. 
113, at p. 115, apparently doubt is cast upon these propositions — 
and it is suggested that the decision in Re Davis was as it was 
because the attention of the Court was not directed to the Act 
1 Geo. Y. ch. 35, sec. 3, taken from R.S.O. 1897, ch. 340, sec. 2. 
Of course, 1 Geo. Y. ch. 35 had not been passed when Re Davis 
was decided: but the statute from which it was ultimately de- 
rived had been in force in England for two hundred and fifty 
years and in our country since Upper Canada became a Province, 
if not before: Anon. (1858), 6 Gr. 632; Davis v. McCaffrey 
(1874), 21 Gr. 554; and other cases. It has not given occasion 
for many decisions in Upper Canada ; but the law is of every day 
application. 

Our statute is derived from 12 Car. II. ch. 24, sec. 8, and car- 
ries the law no further than that statute. The effect of the 
statute is not (I speak with great deference) to take away any 

*The judgment of the Chancellor in Re Hutchinson was reversed by a 
Divisional Court on the 25th June, 1912: 3 O.W.N. 1552. 



Riddell, J. 

1912 

Fidelity 
Trust Co. 
v. 

Buchner. 



372 

Riddell, J. ( 

1912 

Fidelity 
Trust Co. 
v. 

Buchner. 



ONTARIO LAW REPORTS. [vol. 

of the rights of the father, but to enable the father to take away 
the common law rights of others — it does not exclude the right 
of the father himself, but that of “all and every person or per- 
sons claiming the custody or tuition of such child or children 
as guardian in socage, or otherwise.” And, accordingly, as 
Lord Esher says in The Queen v. Barnardo (1889), 23 Q.B.D. 
305, at pp. 310, 311, “The parent of a child, whether father or 
mother, cannot get rid of his or her parental right irrevocably by 
such an agreement. ... As soon as the agreement was re- 
voked, the authority to deal with the child would be at an end. ’ ’ 

The statute is considered in Blackstone, vol. 1, p. 362; Co. 
Litt. 88(5), and Hargrave’s notes; Eversley, 3rd ed., pp. 618, 
619, 620, 622, 646, 743, 744; Simpson, 3rd ed., pp. 95, 105, 111, 
113, 183, 184, 186, 188 sqq. And I do not find any case or text 
in which it has been thought that the statute applied except after 
the death of the father. 

The ordinary rule is, that there cannot be a guardian in the 
lifetime of, the father: Ex p. Mountfort (1808), 15 Yes. 445; 
Barry v. Barry (1828), 1 Molloy 210; Davis v. McCaffrey , 21 Gr. 
at p. 562. 

But, not to press that point, a deed under the statute has 
been called by Lord Eldon, L.C., “only a testamentary instru- 
ment in the form of a deed:” Ex p. Earl of Ilcherster (1803), 
7 Yes. 348, at p. 367. Such a deed has been held, from within a 
few years of the passing of the statute, to be revocable even by a 
will. 

In Shaftsbury v. Hannam (1677), Finch’s Reports (not 
Finch’s Precedents) 323, the dispute was between the plaintiffs, 
claiming under a deed poll, and the defendant, claiming under 
a subsequent will. The Lord Chancellor, Lord Nottingham, 
held that the widow seemed to have a great probability of law 
on her side, and refused to disturb her in her guardianship, un- 
less she refused to prove that she was not excluded by the terms 
of the statute (referring to difference of religion — now of no 
consequence, and, happily, but of interest historically). 

In Lecone v. Sheires (1686), 1 Yern. 442, Lord Jeffreys, L.C., 
would not allow the removal of a guardian appointed by deed, 



! 



XXVI.] 



ONTARIO LAW REPORTS. 



373 



where the deed contained a covenant not to revoke, and the de- 
ceased parent had died in debt to the guardian so appointed. 

In Ex p. Earl of Ilchester, 7 Ves. 348, Lord Eldon, L.C., says 
(p. 367) : “The question takes this turn; whether, as it is neces- 
sary under the statute, that the instrument, whether a deed, 
which I take to be only a testamentary instrument in the form 
of a deed, or a will, should be executed in the presence of two 
witnesses ... it is therefore also necessary, that any instru- 
ment revoking that shall be executed in the presence of two wit- 
nesses. . .” Thus making no distinction between the case of 

a deed and of a will, either being revocable. 

I cannot find any contrary intimation or suggestion of opin- 
ion as to the meaning and effect of the statute. See also I Cyc. 
917. 

The English law is substantially the same as ours, and the de- 
cisions there are of authority with us — and I am unable to recant 
the opinion, expressed in Re Davis, that the law of Ontario, 
strictly speaking, knows nothing of adoption. As the Chancellor 
has not actually decided to the contrary, I am at liberty to follow 
my own judgment. 

It follows that in Ontario there can be no “legal adoption, ” 
in the strict and proper use of the words, as there can be in many 
of the States of the Union : 1 Cyc. 918. The Royal Arcanum is 
an organisation which covers many of the United States, as well 
as Canada ; and its rules are made of general application. 

No doubt, it was in view of the difficulty of framing any 
general rule as to “legal adoption ” that the determination of the 
fact of “legal adoption’ ’ was left to the Supreme Secretary (sec. 
324), and the provision was made that the proof of legal adop- 
tion was to be satisfactory to the Supreme Secretary. In my 
view, the Supreme Secretary was made the judge as to “legal 
adoption” — particularly in a country where “legal adop- 
tion” has no meaning in the proper use of the words. I think 
his decision is final. In our Province, I think that what the 
Supreme Secretary decides to be “legal adoption” is “legal 
adoption” for the purposes of the insurance — no statute or other 
law of the Province being violated. 

As the benefit certificate cannot be issued until the Supreme 



Riddell, J. 



1912 

Fidelity 
Trust Co. 
v. 

Buchner. 



374 



ONTARIO LAW REPORTS. 



Riddell, J. 

1912 

Fidelity 
Trust Co. 
v. 

Buchner. 



VOL. 



Secretary is satisfied, it must be taken that the Supreme Secre- 
tary has decided that Lucy Hendershot was the adopted daugh- 
ter, or to use the words of the rules, the child by legal adoption, 
of the member: Ancient Order of United Workman of Quebec v. 
Turner (1910), 44 S.C.R. 145. 

(b) I think it equally clear that Rhoder made “no other or 
further disposition thereof as provided in the Laws of the 
Order ; ’ ’ sec. 327 makes an assignment void, and sec. 326 declares 
that a certificate is not to be held or assigned to secure or 
pay any debt ; and the provisions of sec. 333, permitting a change 
of beneficiary to be effected by surrender of certificate and pay- 
ment of a small fee, have not been taken advantage of. 

( c ) The defendant appeals to the Act of 1904, 4 Edw. VII. 
ch. 15, sec. 7 : but that has no application — it applies only in the 
case of preferred beneficiaries — husband, wife, children, grand- 
children, or mother : R.S.O. 1897, ch. 203, sec. 159 ; and adopted 
children are no more “ children ” than are godchildren, or than 
the “wife” in Crosby v. Ball (1902), 4 O.L.R. 496, or Deere v. 
Beauvais (1906), 7 Q.P.R. 448, was a wife. 

The statute to apply is R.S.O. 1897, ch. 203, sec. 151(3): 
“The assured may designate . . . the beneficiary . . -. 
and may ... by the . . . like instrument from time to 
time . . . alter . . . the benefits ... or substitute 
new beneficiaries . . . .” (6) “And if all the beneficiaries 
die in the lifetime of the assured . . . the insurance money 

shall form part of the estate of the assured. ’ ’ This is applicable 
to the Royal Arcanum: sec. 147. The Royal Arcanum is not a 
society incorporated under R.S.O. 1897, ch. 211 (an Act respect- 
ing Benevolent, Provident, and other Societies), so as to be 
entitled to pay the insurance money “to the person or persons 
entitled under the rules thereof:” ch. 211, sec. 12. The incor- 
poration was in Massachusetts in 1877, under the provisions of 
the laws there in force, substantially as in ch. 115 and ch. 106 of 
the Public Statutes, 1881. 

Its position is, therefore, in the view of our law, the same 
as that any other insurance company — e.g., that of the Catholic 
Order of Foresters in Gillie v. Young (1901), 1 O.L.R. 368. 
That case decides that the rules of the “Order” must give way 



XXVI.] 



ONTARIO LAW REPORTS. 



375 



to the provisions of the statute so far as they are inconsistent 
therewith. Mingeaud v. Packer (1891), 21 O.R. 267, S. C. 
(1892), 19 A.R. 290, and Be Harrison (1900), 31 O.R. 314, may 
also be looked at. 

If, then, the declaration endorsed on the certificate has any 
validity, the plaintiffs must fail in the issues offered by them. 

The grounds of attack upon th6 endorsement are, it will be 
seen, two in number: ( a ) that the endorsement was not read to 
or by Rhoder; and ( b ) that it was ignored and treated as null 
and void by both Rhoder and the defendant until the death of 
Rhoder. 

As to (a), there is not the slightest evidence that Rhoder did 
not fully understand what he was signing; he has signed his 
name legibly, and nothing indicates illiteracy in any way ; 
letters, indeed, are produced, written by him, shewing the re- 
vere. The second ground is equally baseless : considerable testi- 
mony was given indicating that the policy was transferred 
rather by way of security for a loan or series of loans than the 
reverse, but nothing suggests, much less proyes, that the trans- 
fer “was ignored” or “treated” as “null and void.” 

The above will dispose of the issues offered in the plaintiffs’ 
claim : — 

(1) The infants are not “the designated preferred bene- 
ficiaries of their grandfather . . . T. R. Rhoder,” for the 

double reason that they are not “preferred beneficiaries” at all, 
within the meaning of the statute, T. R. Rhoder not having been 
their grandfather in a legal sense ; and, second, he made a new 
beneficiary under the provisions of the law in that regard. 

(2) “The plaintiffs as next friend to the said infant child- 
ren” are not “entitled to payment out of Court of the said sum” 
for several reasons. Assuming (what I by no means concede) 
that this company can be a next friend at all (RjS.O. 1897, ch. 
206, secs. 4, 5, 8; Nalder v. Haivkins (1833), 2 My. & K. 243), 
(a) the next friend is not entitled to the infants’ money: Vano 
v. Canadian Coloured Cotton Mills Co. (1910), 21 O.L.R. 144; 
he is brought into Court simply to protect the infants’ rights 
and guarantee the costs: Dyke v. Stephens (1885), 30 Ch. D. 



Riddell, J. 

1912 

Fidelity 
Trust Co. 
v. 

Buchner. 






376 

Riddell, J. 

1912 

Fidelity 
Trust Co. 

v. 

Buchner. 



ONTARIO LAW REPORTS. [vol. 

189, at pp. 190, 191; Smith v. Mason (1897), 17 P.R. 444; and 
(&), the infants are not entitled to the money in any case. 

(3) The plaintiffs basing their claim to the money specifi- 
cally “in that the endorsement was not read,” etc., and “was 
ignored,” etc., they fail upon this issue as well. 

This by no means disposes of the whole matter. The evi- 
dence convinces me that, while the transfer is absolute in form, 
it was in fact but security for advances already made and to 
be made. The defendant says that he advanced more than the 
amount paid into Court ; and I think I should not order a refer- 
ence unless the plaintiffs assume the responsibility of asking 
for one. The cross-examination of the defendant was not appar- 
ently directed to shewing that he had not advanced the amount 
he claimed. The plaintiffs as administrators would be entitled to 
the proceeds of the certificate less the amount advanced, etc. 

If, within ten days from this date, the plaintiffs apply for an 
order of reference, such order may go, at their peril as to cists, 
referring it to the Master at London to determine the amount 
for which the certificate is security in the hands of the defend- 
ant. In that fevent, I shall reserve to myself the question of costs 
and further directions until after the Master shall have made his 
report. If such an order be not taken out by the plaintiffs, I 
now find all the issues in favour of the defendant, direct the 
plaintiffs to pay all the costs over which I have control, and 
order the payment out to the defendant of the amount paid into 
Court. 

[The plaintiffs accepted the reference offered in the judgment; and an 
order was accordingly made referring it to the Master at London to inquire 
and report upon the amount for which the insurance certificate and the 
assignment thereof were security.] 






XXVI.] 



ONTARIO LAW REPORTS. 



377 



[MIDDLETON, J.] 

Re Matthew Guy Carriage and Automobile Co. 



Company — Winding-up — Directors — Misfeasance — Payment for Services as 
Workmen and Clerks — Ontario Companies Act , sec. 88. 

Section 88 of the Ontario Companies Act, 7 Edw. VII. ch. 34, providing that 
“no by-law for the payment of the president or any director shall be 
valid or acted upon until the same has been confirmed at a general 
meeting,” applies to all cases in which a by-law is necessary for the 
payment, and covers the remuneration of all officers of the company 
whose appointment should properly be made by by-law. 

Birney v. Toronto Milk Co. (1902), 5 O.L.R. 1, explained and followed. 
But there is no warrant for extending the principle to a case in which the 
director has acted as a mere workman or clerk, and has been remuner- 
ated at a rate not exceeding the real value of the services rendered, at 
the ordinary market-price. The section itself does not prohibit the re- 
muneration of a director; and the company cannot retain the benefit of 
the services rendered by a person employed in a subordinate capacity, 
who is also a director, without paying a fair price. If the statute 
renders the contract of hiring invalid, directors who have rendered 
manual and clerical services have a right to receive a quantum meruit 
for those services; and, if they have not received more, cannot be held 
guilty of misfeasance. 

Burland v. Earle , [1902] A.C. 83, 101, followed. 

Re Queen City Plate Glass Co., Eastmure’s Case (1910), 1 O.W.N. 863, 
Re Morlock and Cline Limited, Sarvis and Canning’s Claims (1911), 23 
O.L.R. 165, and Benor v. Canadian Mail Order Co. (1907), 10 O.W.R. 
1091, distinguished. 

An appeal by the directors of the company, in liquidation, 
from an order of the Master in Ordinary, dated the 1st April, 
1912, upon the return of a misfeasance summons, whereby he 
directed the directors severally to repay certain sums received 
by them from the company in remuneration for services ren- 
dered. 

May 2. The appeal was heard by Middleton, J., in the 
Weekly Court at Toronto. 

F. S. Mearns, for certain directors. 

W. S. McBrctyne, for other directors. 

G. H. Kilmer , K.C., for the liquidator. 

May 7. Middleton, J. : — After most careful consideration, I 
am unable to agree with the learned Master. I adhere to the 
views expressed in Re Queen City Plate Glass Co., Eastmure’s 
Case (1910), 1 O.W.N. 863, as to the wide effect to be given to 
sec. 88 of the Ontario Companies Act, 7 Edw. VII. ch. 34; but I 



1912 

May 7 



378 

Middleton, J. 

1912 

Re 

Matthew 

Guy 

Carriage 

and 

Auto- 

mobile 

Co. 



ONTARIO LAW REPORTS. [vol. 



think this case entirely different from any of the reported deci- 
sions, and falls quite outside the section. 

The company was incorporated for the purpose, inter alia, 
of manufacturing automobiles. F. M. Guy was a practical 
mechanic, and worked at manual labour in the company’s shop, 
receiving a weekly wage of $15. Daniels also worked, first in 
the factory and afterwards as a stenographer in the office, re- 
ceiving the ordinary wage paid to those in like employment. 
Walter was employed as a painter and varnisher in the factory. 
Armstrong was the company’s bookkeeper. All of these men 
had been employed by Matthew Guy, the original owner of the 
'business, before it was taken over by the incorporated company; 
and a formidable contention is made on behalf of these directors 
that it was part of the original understanding, upon the trans- 
fer of the business, that the company should assume the existing 
contracts with employees ; but I prefer not to base my judgment 
upon this aspect of the case. 



The section of the statute provides: “No by-law for the 
payment of the president or any director shall be valid or acted 
upon until the same has been confirmed at a general meeting.” 
There is much to be said in favour of the contention put forward 
by the appellants, that this section relates to the payment of the 
president or director for his services rendered in his official 
capacity, and that it was not intended to deal with payments 
made to him for services rendered in any other capacity. This 
seems to have been the view entertained by Mr. Justice Mere- 
dith in Mackenzie v. Maple Mountain Mining Co. (1910), 20 
O.L.R. 615, where he says (p. 621) : “The purpose of the enact- 
ment is that those who govern the company shall not have it in 
their power to pay themselves for their services in such govern- 
ment without the shareholders’ sanction,” 

But I think that the Courts have adopted a wider view of 
the statute, and that it must be taken to apply to all cases in 
which a by-law is necessary for the payment, and to cover the 
remuneration of all officers of the company whose appointment 
should properly be made by by-law. 

Birney v. Toronto Milk Co. (1902), 5 O.L.R. 1, is now re- 
cognised as conclusive authority for this position. The claim 



XXVI.] 



ONTARIO LAW REPORTS. 



379 



there was upon an executory contract by which the plaintiff was 
employed as the manager of the company. The holding is, that 
the plaintiff could not recover because no by-law for his pay- 
ment had been passed and no contract was made under the cor- 
porate seal. It was pointed out that the appointment of a man- 
ager was an entirely different thing from the appointment of 
mere servants or casual or temporary hiring; the latter con- 
tracts not necessitating either a by-law or a contract under seal. 
It is with reference to such an appointment that Mr. Justice 
Street used the words relied upon by the liquidator (p. 6) : “In 
my opinion we should hold the section as requiring the sanction 
of the shareholders as a condition precedent to the validity of 
every payment voted by directors to any one or more of them- 
selves, whether under the guise of fees for attendance at board 
meetings or for the performance of any other services for the 
company. It is not conceivable that the Legislature intended 
to forbid the directors from voting small sums to themselves for 
their attendance at board meetings, without obtaining the con- 
sent of the shareholders, and at the same time to allow them to 
vote large sums to themselves for doing other work, without re- 
ference at all to the shareholders. The interpretation contended 
for by the plaintiff would in fact render the section nugatory, 
for nothing would be easier than to evade it. I think the section 
should be given a broad and wholesome interpretation, and 
that it should be held wide enough to prevent a president and 
board of directors from voting to themselves or to any one or 
more of themselves any remuneration whatever for any services 
rendered to the company without the authority of a general 
meeting of the shareholders.” 

I have neither the right nor the inclination to narrow this 
statement of the law, when rightly understood; but, bearing in 
mind that it was spoken of an employment for which a by-law 
is necessary, and that the section itself does not prohibit the 
remuneration of a director, but merely renders invalid any by- 
law, I do not think that there is any warrant for extending the 
principle to cases in which the director has acted as a mere 
workman or clerk and has been remunerated at a rate not exceed- 
ing the real value of the services rendered, at the ordinary 
market-price. 



Middleton, J. 

1912 

Re 

Matthew 

Guy 

Carriage 

and 

Auto- 

mobile 

Co. 



380 



ONTARIO LAW REPORTS. [vol. 



Middleton, J, 



1912 

Re 

Matthew 

Guy 

Carriage 

and 

Auto- 

mobile 

Co. 



I think that the principle applicable is analogous to that 
applied to ultra vires contracts, where the company has received 
the benefit. It cannot retain the benefit without paying a fair 
price. If the effect of the statute is somewhat larger than I 
have indicated, and renders invalid the contract of hiring, then 
the directors have, as servants of the company, in the discharge 
of the manual and clerical services which they have respectively 
rendered to the company, a right to receive a quantum meruit 
for those services. It is not suggested that they have received 
more than this. Therefore, they have not been guilty of mis- 
feasance. 



I do not find anything in the decided cases opposed to this 
view. In Be Queen City Plate Glass Co., Eastmure’s Case, supra , 
repayment was ordered of salary received by Eastmure as pre- 
sident; and I refused to recognise any claim based upon a 
quantum meruit, because, when services have been rendered by 
a director and accepted, no promise to pay can be inferred; his 
services, in the absence of the by-law, being deemed to be gra- 
tuitous. But here the whole circumstances shew that the wages 
were paid as remuneration for labour in the factory and office, 
and indicate that it was not intended that the labour should be 
gratuitously rendered. 

In Burland v. Earle, [1902] A.C. 83, at p. 101, this view 
appears to receive the sanction of The Privy Council. J. H. Bur- 
land had been secretary. When he became a director, and was 
appointed vice-president, he continued to do the same class of 
work that he had done as secretary. “He was allowed by the 
directors to continue to draw his former salary without any 
observation until the present action; and their Lordships think 
that the inference may fairly be drawn, from all the circum- 
stances of the case, that he was intended to retain his salary, 
although there was a shifting of the offices. ’ ’ 



So here, I think the true intendment was, that, upon the tak- 
ing over of these carriage works by the incorporated company, 
the former employees were intended to continue to render simi- 
lar services and to draw the same remuneration as they had 
theretofore received. I do not put this as being part of the bar- 



XXVI.] 



ONTARIO LAW REPORTS. 



381 



gain, but as being the result of their continuation in the 
employment. 

Re Morlock and Cline Limited , Sarvis and Canning’s Claims 
(1911), 23 O.L.R. 165, is very close to this case; and, as I 
had some doubt whether it might not be regarded as determin- 
ing the point in a way opposed to my present view, I availed my- 
self of the privilege of discussing it, and Benor v. Canadian Mail 
Order Co. (1907), 10 O.W.R. 1091, witji my brother Riddell; and 
he tells me that, in his view, these cases are not opposed to the 
opinion which I have formed. In the Benor case, a by-law was 
clearly necessary; and in the Morlock case, the distinction be- 
tween cases in which a by-law is necessary and cases of the 
employment of a mere servant was not suggested. 

For these reasons, I think the appeal succeeds, and should be 
allowed, with costs here and below. 



[DIVISIONAL COURT.] 

Re Rex v. Hamlink. 

[ Prohibition — County Court Judge — Jurisdiction — Convictions under Inspec- 
tion and Sale Act, R.S.C. 1906, ch. 85, sec. 321 — Appeal to County 
Court under sec. 335 — Time for Hearing and Decision — Extension — * 
Powers of Judge — Costs of Appeal — Criminal Code, R.S.C. 1906, ch. 
146, sec. 751 — Taxation by Clerk of County Court — Adoption by Judge 
— Amendment of Order — Sessions Practice — Discretion. 

On the 11th January, 1910, the defendant was convicted by a Police Magis- 
trate of three offences against sec. 321 of the Inspection and Sale Act, 
R.S.C. 1906, ch. 85. On the 17th January, the defendant appealed, 
under sec. 335 of the Act, to a County Court; the appeal came before the 
Judge of the County Court on the 7th February; and, upon that day, the 
Judge made an order extending for ten days the time for hearing the 
appeal. On the 17th February, the hearing was enlarged to the 17th 
March; again, to the 22nd March; and upon the 22nd March and 23rd 
March the appeal was heard. After argument, judgment was reserved; 
and on the 30th April judgment was given and an order made dismissing 
the appeal and affirming the convictions, “with costs to be paid by the 
appellant to the respondent; such costs to be taxed according to the 
scale of costs taxable in this Court, and such costs to be taxed by the 
clerk of this Court.” The respondent’s costs were taxed by the clerk on 
the 16th June, against the defendant’s protest. The defendant moved 
before a Judge of the High Court for an order prohibiting the respond- 
ent and the County Court Judge and clerk from taking any further pro- 
ceedings, upon the grounds : ( 1 ) that the Judge, when he made the order, 
was functus officio ; (2) that the decision was not given within thirty 
days from the date of conviction, nor was the time for hearing and deci- 
sion extended, as required by sub-sec. 2 of sec. 335; (3) that the Judge 
did not find the amount of costs, but directed the costs to be taxed by 
the elerk; (4) that the Judge, having made his final order without fix- 
ing the costs, was functus officio-, (5) that the clerk had no jurisdiction 
to tax the costs. 



Middleton, ,T. 

1912 

Re 

Matthew 

Guy 

Carriage 

and 

Auto- 

mobile 

Co. 



D. C. 
1910 

Nov. 3. 

1912 
May 10. 



26 — XXVI. O.L.R. 



382 



ONTARIO LAW REPORTS. 



[VOL. 



D. C. 
1910 

Re Rex 
v. 

Hamlink. 



The motion for prohibition came before Sutherland, J., who ordered that 
it should he enlarged for ten days, to enable the respondent to apply to 
the County Court Judge to amend his order by himself fixing the amount 
of costs, and dismissed in the event of that course typing taken: — 

Held, affirming the order of Sutherland, J., that the County Court Judge 
was not functus officio ; and that the case was not one for prohibition.” 

History of the legislation upon the subject of the costs of appeals from con- 
victions and review of the authorities. 

Per Riddell, J. : — The order extending the time to ten days after the 7th 
February, that is, to the 17th February, more than thirty days after the 
conviction, made the time wholly at large and wholly in the discretion of 
the Judge. The extension of the time for hearing the appeal was an 
extension of the time for decision as well; and the order of the 7th 
February was an order “extending the time for hearing and decision,” 
under sec. 335 (2). As there is no time-limit or limit to any particular 
sittings, the Court is not functus officio until everything is done which 
should be done. 

The very most that could be said was, that the Judge had not stamped the 
amount of costs with his approval, and caused that amount to be inserted 
in the order. Prohibition is not ex debito justitice — it is an extreme 
measure; and it would be absurd to prohibit the Judge from acting upon 
an order which he could make right with a few strokes of his pen. 

Distinction between cases arising out of appeals to the Sessions and this 
appeal to a